seasonality index
Definition
A forecasting tool used to determine demand for various commodities or goods in a given marketplace over the course of a typical year (or a shorter time period). Such an index is based on data from previous years that highlights seasonal differences in consumption. In some industries, the seasonality index experiences huge swings. For example, toy makers are likely to experience peak demand in the month leading up to Christmas. Data from a seasonality index may be used to determine safety lead times or safety stock levels.
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