Ch5

Question 1

Time series analysis?

Answer 1

A series in figures recorded over a period of time. E.g. sales per month over 3 years (a series of 36 figures)

Question 2

Components of time series analysis?

Answer 2

Trend-long term movement in a consistent direction e.g. sales of mobile phones over the last 5 years
Seasonal variation -predictable,recurring fluctuations over the short term e.g. ice cream retailer
Cyclical variation-recurring patterns over the long term e.g. economic recessions and booms
Random variation-unpredictable fluctuations caused by random events e.g. war

Question 3

Time series models?

Answer 3

Additive models
TS=T+SV

Multiplication models
TS=TxSV

Question 4

De-seasonalising data?

Answer 4

If TS=TxSV
Then T =TS/SV

Question 5

Finding the trend and seasonal variation

Answer 5

Find moving average

Find trend using first moving average-last moving average and dividing it by how many steps there are between them both

Find the difference between the date and moving average

Find the seasonal variation for 3 weeks and calculate an average

Question 6

Time series analysis

Answer 6

Adjust historic figure using the growth trend % and then use this as a base for all quarters

Then adjust the figures using the seasonal variation

Total the figures

Question 7

Linear aggression

Answer 7

Y=a+bx
Y=total costs (y axis)
X=volume of production units (x axis)
A=point where the line intercepts the y axis
B=the slope of the line which is the VC/unit

Question 8

Expected values and sensitivity

Answer 8

Profit/the cost your testing X100