Exam 16: Time Series and Forecasting

Teton Village contains shops, restaurants and motels. They have two peak seasons - winter for skiing, and summer for tourists visiting nearby parks. The specific seasonal with respect to the total sales volume for recent years are: Using the seasonal indexes below, explain the typical index for the spring season.

What is a disadvantage of estimating a trend line equation by "eye-balling" the best fitting line to a scatter diagram?

i. A typical monthly seasonal index of 107.0 indicates that sales (or whatever the variable is) are 7 percent above the annual average. ii. Seasonal variation is quite common in the retail and wholesale industries. iii. A typical seasonal index of 103.7 for January indicates that sales for January are below the annual average.

i. In the linear trend equation, the letter "b" is the average change in t for each change of one unit (either increase or decrease) in y. ii. The least squares method of computing the equation for a straight line going through the data of interest gives the "best fitting" line. iii. A straight-line trend equation is used to represent the time series when it is believed that the data is increasing(or decreasing) by equal amounts, on the average, from one period to another.

What is the forecast for year 9?

What is the general equation for the logarithmic trend equation is log =

i. In the linear trend equation, the letter "b" is the average change in t for each change of one unit (either increase or decrease) in y. ii. In the linear trend equation, t is any value that corresponds with a time period, i.e., month or quarter. iii. The least squares method of computing the equation for a straight line going through the data of interest gives the "best fitting" line.

i. For a quarterly time series, the initial step, using the ratio-to-moving average method, is to remove the seasonal components from the time series using a 3-month centered moving average. ii. In the ratio-to-moving-average procedure, using the median or modified mean eliminates trend. iii. In the final step, using the ratio-to-moving-average method on quarterly data, the total of the modified means should theoretically be equal to 400 because the average of should be 100.

Teton Village contains shops, restaurants and motels. They have two peak seasons, - winter for skiing, and summer, for tourists visiting nearby parks. The specific seasonal with respect to the total sales volume for recent years are: Using the seasonal indexes below, explain the typical index for the fall season.

If a quarterly seasonal index is 0.56, it implies that:

What is the correct order of events in a typical business cycle?

The Westberg Electric Company sells electric motors. The monthly trend equation, based on four years of monthly data, is Y' = 4.4 + 0.5t. The seasonal factor for the month of April is 98. Determine the seasonally adjusted forecast for April of the fifth year.

The Westberg Electric Company sells electric motors. The monthly trend equation, based on four years of monthly data, is Y' = 4.4 + 0.5t. The seasonal factor for the month of May is 85. Determine the seasonally adjusted forecast for May of the fifth year.

Listed below is the net sales in $ million for Home Depot Inc., and its subsidiaries from 1994 to 2003. Using the printout below, what are the estimated sales for 2007?

The Westberg Electric Company sells electric motors. The monthly trend equation, based on four years of monthly data, is Y' = 4.4 + 0.5t. The seasonal factor for the month of March is 100. Determine the seasonally adjusted forecast for March of the fifth year.

What is variation within a year, such as high sales at Christmas and Easter and low sales in January, called?

Why are long range predictions considered essential to managing a firm?

A time series is a collection of data that:

What is the long-term behavior of a variable over an extended period of time called?

i. A forecast is considered necessary in order to have the raw materials, production facilities, and staff available to meet estimated future demands. ii. One component of a time series is the secular trend that is the smooth movement of a series over a short period of time, such as a few months or quarters. iii. Many business and economic time series have a recurring seasonal pattern.