How should seasonality be treated in a rolling forecast?

• A. Seasonality is irrelevant
• B. Seasonality ignored
• C. Seasonal patterns should be included in forecasts and adjusted quarterly.
• D. Seasonality only affects Q4

Answer: (C)

Seasonality drives repeating ups and downs in demand, so a forecast that will be used for planning should reflect those patterns rather than assuming a flat or uniform trajectory. In a rolling forecast, you continuously update the plan as new data comes in, which means you also refresh the seasonal factors to keep the forecast aligned with current cycles. Re-estimating or adjusting seasonal effects quarterly provides a practical cadence to capture any changes in the strength or timing of seasonal peaks and troughs, such as shifts from promotions, market conditions, or consumer behavior. This approach ensures resources, inventory, and cash flow plans are prepared for the actual seasonal reality ahead, not just an average year. Seasonal patterns can affect more than just the fourth quarter, so incorporating them across the applicable periods helps avoid systematic over- or under-forecasting. A solid method is to apply historical seasonal patterns and update those factors periodically with fresh data, so the forecast carries accurate cyclical guidance into the future.