Exam 14: Time-Series Forecasting and Index Numbers

In the Holt-Winters method of forecasting,to give more weight to recent levels of the time series,you would use ________.

The Paasche price index uses the consumption quantities in the year of interest as the weights.

Instruction 14-13 The manager of a marketing consulting firm has been examining his company's yearly profits.He believes that these profits have been showing a quadratic trend since 1990.He uses Microsoft Excel to obtain the partial output below.The dependent variable is profit (in thousands of dollars),while the independent variables are coded years and squared of coded years,where 1990 is coded as 0,1991 is coded as 1,etc. SUMMARY OUTPUT Regression Statistics Multiple R 0.998 R Square 0.996 Adjusted R Square 0.996 Standard Error 4.996 Observations 17 $\quad\quad\quad\quad\quad\quad\quad$ Coefficients Intercept $\quad\quad\quad\quad\quad 35.5$ Coded Year $\quad\quad\quad\quad 0.45$ Year Squared 1.00 -Referring to Instruction 14-13,the fitted value for 1990 is ________.

Instruction 14-5 A local store developed a multiplicative time-series model to forecast its revenues in future quarters,using quarterly data on its revenues during the 4-year period from 2005 to 2009.The following is the resulting regression equation: log 10 $\hat { Y }$ = 6.102 + 0.012 X - 0.129 Q₁ - 0.054 Q₂ + 0.098 Q₃ Where $\hat { Y }$ is the estimated number of contracts in a quarter X is the coded quarterly value with X = 0 in the first quarter of 2005. Q₁ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise. Q₂ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise. Q₃ is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise. -Referring to Instruction 14-5,the best interpretation of the coefficient of Q₂ (-0.054)in the regression equation is

To convert actual dollars to real dollars,multiple each dollar value in a time series by ________.

Instruction 14-9 The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows. Year Cases of Wine 2003 270 2004 356 2005 398 2006 456 2007 358 2008 500 2009 410 2010 376 -Referring to Instruction 14-9,plot both the wine sales series and the series of Holt-Winters forecast for 2011 to 2014 using a smoothing constant of 0.2 for both level and trend.

Instruction 14-13 The manager of a marketing consulting firm has been examining his company's yearly profits.He believes that these profits have been showing a quadratic trend since 1990.He uses Microsoft Excel to obtain the partial output below.The dependent variable is profit (in thousands of dollars),while the independent variables are coded years and squared of coded years,where 1990 is coded as 0,1991 is coded as 1,etc. SUMMARY OUTPUT Regression Statistics Multiple R 0.998 R Square 0.996 Adjusted R Square 0.996 Standard Error 4.996 Observations 17 $\quad\quad\quad\quad\quad\quad\quad$ Coefficients Intercept $\quad\quad\quad\quad\quad 35.5$ Coded Year $\quad\quad\quad\quad 0.45$ Year Squared 1.00 -Referring to Instruction 14-13,the fitted value for 1995 is ________.

Instruction 14-4 A contractor developed a multiplicative time-series model to forecast the number of contracts in future quarters,using quarterly data on number of contracts during the 3-year period from 2008 to 2010.The following is the resulting regression equation: $\log _ { 10 } \hat { Y } = 3.37 + 0.117 X - 0.083 Q _ { 1 } + 1.28 Q _ { 2 } + 0.617 Q _ { 3 }$ Where $\hat { Y }$ is the estimated number of contracts in a quarter X is the coded quarterly value with X = 0 in the first quarter of 2008. Q₁ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise. Q₂ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise. Q₃ is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise. -Referring to Instruction 14-4,in testing the coefficient for Q₁ in the regression equation (-0.083),the results were a t-statistic of -0.66 and an associated p-value of 0.530.Which of the following is the best interpretation of this result?

Instruction 14-21 Given below are the average prices for three types of energy products in Australia from 2006 to 2010. Year Electricity Natural Gas Fuel Oil 2006 43.205 25.893 0.892 2007 16.959 28.749 0.969 2008 47.202 28.933 1.034 2009 48.874 29.872 0.913 2010 48.693 28.384 0.983 -Referring to Instruction 14-21,what are the simple price indexes for electricity,natural gas and fuel oil,respectively,in 2009 using 2006 as the base year?

The Holt-Winters method of forecasting includes future trend.

Instruction 14-5 A local store developed a multiplicative time-series model to forecast its revenues in future quarters,using quarterly data on its revenues during the 4-year period from 2005 to 2009.The following is the resulting regression equation: log 10 $\hat { Y }$ = 6.102 + 0.012 X - 0.129 Q₁ - 0.054 Q₂ + 0.098 Q₃ Where $\hat { Y }$ is the estimated number of contracts in a quarter X is the coded quarterly value with X = 0 in the first quarter of 2005. Q₁ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise. Q₂ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise. Q₃ is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise. -Referring to Instruction 14-5,the estimated quarterly compound growth rate in revenues is around

The fairly regular fluctuations that occur within each year would be contained in the ________ component.

Instruction 14-10 The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48. -Referring to Instruction 14-10,the number of arrivals will be smoothed with a 3-term moving average.There will be a total of ________ smoothed values.

Instruction 14-9 The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows. Year Cases of Wine 2003 270 2004 356 2005 398 2006 456 2007 358 2008 500 2009 410 2010 376 -Referring to Instruction 14-9,a centred 5-year moving average is to be constructed for the wine sales.The moving average for 2005 is ________.

Instruction 14-17 The monthly advertising expenditures of a department store chain (in $1,000,000s)were collected over the last decade.The last 14 months of this time series follows: Month Expenditures (\ ) 1 1.4 2 1.8 3 1.6 4 1.5 5 1.8 6 1.7 7 1.9 8 2.2 9 1.9 10 1.9 11 2.1 12 2.4 13 2.8 14 3.1 -Referring to Instruction 14-17,set up a scatter diagram (i.e. ,time-series plot)with months on the horizontal X-axis.

Instruction 14-9 The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows. Year Cases of Wine 2003 270 2004 356 2005 398 2006 456 2007 358 2008 500 2009 410 2010 376 -Referring to Instruction 14-9,construct a centred 5-year moving average for the wine sales.

Instruction 14-9 The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows. Year Cases of Wine 2003 270 2004 356 2005 398 2006 456 2007 358 2008 500 2009 410 2010 376 -Referring to Instruction 14-9,exponential smoothing with a weight or smoothing constant of 0.2 will be used to forecast wine sales.The forecast for 2011 is ________.

Instruction 14-12 The executive vice-president of a drug manufacturing firm believes that the demand for the firm's most popular drug has been evidencing an exponential trend since 1995.She uses Microsoft Excel to obtain the partial output below.The dependent variable is the log base 10 of the demand for the drug,while the independent variable is years,where 1995 is coded as 0,1996 is coded as 1,etc. SUMMARY OUTPUT Regression Statistics Multiple R 0.996 R Square 0.992 Adjusted R Square 0.991 Standard Error 0.02831 Observations $\quad \quad \quad \quad \quad \quad \quad \quad$ 12 $\quad \quad \quad \quad \quad \quad$ Coefficients Intercept 1.44 Coded Year 0.068 -Referring to Instruction 14-12,the fitted trend value for 2000 is ________.

Which of the following is NOT an advantage of exponential smoothing?

Instruction 14-19 The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48. -Referring to Instruction 14-19,use the Holt-Winters method of fitting number of arrivals to compute the smoothed level and trend with a smoothing constant of 0.3 for both level and trend.