Exam 12: Time Series Analysis and Forecasting

Which of the following is not one of the techniques that can be used to identify whether a time series is truly random?

A shortcoming of the RMSE (root mean square error)is that it is not in the same units as the forecast variable.

Obtain an autocorrelation table for this series.

If the span of a moving average is large - say,12 months - then few observations go into each average,and extreme values have relatively large effect on the forecasts.

Develop a time series plot of the data.Does the data appear random on the plot?

Examples of non-random patterns that may be evident on a time series graph include

The random walk model is written as: .In this model, represents the

In a multiplicative seasonal model,we multiply a "base" forecast by an appropriate seasonal index.These indexes,one for each season,typically average to 1.

Explain briefly whether the plot of the series visually supports the company's suspicion.

Regression models with seasonal dummy variables produce coefficients for each quarter,which represent the additive or multiplicative factors relative to the annual average.

If a random series has too few runs,then it is zigzagging too often.

If we use a value close to 1 for the level smoothing constant and a value close to 0 for the trend smoothing constant in Holt's exponential smoothing model,then we expect the model to respond very quickly to changes in the level,but very slowly to changes in the trend.

The linear trend was estimated using a time series with 20 time periods.The forecasted value for time period 21 is

When using Holt's model,choosing values of the smoothing constant that are near 1 will result in forecast models that react very

If we use a value close to 1 for the smoothing constant in a simple exponential smoothing model,then we expect the model to respond very slowly to changes in the level.

In a random series,successive observations are probabilistically independent of one another.If this property is violated,the observations are said to be

Suppose that a simple exponential smoothing model is used (with = 0.40)to forecast monthly sandwich sales at a local sandwich shop.The forecasted demand for September was 1560 and the actual demand was 1480 sandwiches.Given this information,what would be the forecast number of sandwiches for October?

Obtain a time series graph of the data.If you will be using a moving average model of the data,what information does this graph provide to help specify such a model?

What is a component of a time series?

A trend component of a time series is a long-term,relatively smooth pattern or direction exhibited by a series,and its duration is more than one year.