Exam 18: Time Series and Forecasting

Based on quarterly data collected over the last five years,the following regression equation was found to forecast the quarterly demand for the number of new copies of a business statistics textbook: = 2,298 - 6635Qtr1 - 1,446Qtr2 + 303Qtr3 + 26t,where Qtr1,Qtr2,and Qtr3 are dummy variables corresponding to Quarters 1,2,and 3,and t = time period. The demand forecast for the second quarter of the next year is ______.

The following table shows the annual revenues (in millions of dollars)of a pharmaceutical company over the period 1990-2011. The Excel scatterplot shown indicates that the annual revenues have an increasing trend.Therefore,linear,exponential,quadratic,and cubic models were used to fit the trend,and the following relevant information became available after applying linear regression. Which of the following is a revenue forecast for 2012 found by the polynomial trend equation with the best fit?

When the increase in the series gets larger over time,it is attractive to use the __________ trend model.

The cyclical component of a time series typically represents repetitions within a one-year period.

The past monthly demands are shown below.The naïve method,that is,the one-period moving average method,is applied to make forecasts. What is the mean absolute deviation (MAD)of the forecasts?

Which of the following is true of the linear trend model?

A linear trend can be estimated using _________ technique.

When using Excel to calculate an exponentially smoothed series,we first activate the Exponential Smoothing dialog box.After selecting the relevant time series we have to select the box next to Damping Factor.If we want to construct an exponentially smoothed series with α,then for Damping Factor we enter _____.

The following table includes the information about a monthly time series. What is the forecast for May using the exponential smoothing method with α = 0.1?

Quarterly sales of a department store for the last seven years are given in the following table. The Excel scatterplot shown indicates that the quarterly sales have an increasing trend and seasonality.Therefore,the linear regression model,Sales = β₀ + β₁Qtr1 + β₂Qtr2 + β₃Qtr3 + β₄t + ε,with three seasonal dummy variables Qtr1,Qtr2,and Qtr3,and the decomposition method are proposed to make sales forecasts.For the regression model,the following Excel partial output is available. Using the regression equation for the linear trend model with seasonal dummy variables,what is the sales forecast for the first quarter of Year 8?

Prices of crude oil have been steadily rising over the last two years (The Wall Street Journal,December 14,2010).The monthly data on price per gallon of unleaded regular gasoline in the United States from January 2009 to December 2010 were available.Three trend models were created,and the following relevant information became available. Which of the following would be a difference in the forecasts for the price of regular unleaded gasoline for February 2011 comparing two trend models: cubic and quadratic?

The following table includes the information about a monthly time series. When the exponential smoothing method with α = 0.1 is applied,what is the MAD?

In comparison with the linear trend model,which of the following is not true of the cubic trend model?

Which of the following equations is a one-period-ahead forecast of the autoregressive model AR(1)?

If there are T observations (y_i,x_i)to estimate the lagged regression model y_t = β₀ + β₁x_{t - 1} + ε_t,what is the actual number of observations used to make the forecast for time period T?

With the method of seasonal dummy variables,we estimate a trend forecasting model that includes _________ dummies.

The following table shows the annual revenues (in millions of dollars)of a pharmaceutical company over the period 1990-2011. The Excel scatterplot shown indicates that the annual revenues have an increasing trend.Therefore,linear,exponential,quadratic,and cubic models were used to fit the trend,and the following relevant information became available after applying linear regression. Which of the following is a revenue forecast for 2012 found by the exponential trend equation?

Which of the following is a criticism made of qualitative forecasts?

When the modely_t = T_t × S_t × I_t is assumed,to identify the _______,we have to find the seasonally adjusted series.

The following table shows the annual revenues (in millions of dollars)of a pharmaceutical company over the period 1990-2011. The autoregressive models of order 1 and 2,y_t = β₀ + β₁y_{t - 1} + ε_t,and y_t = β₀ + β₁y_{t - 1} + β₂y_{t - 2} + ε_t,were applied on the time series to make revenue forecasts.The relevant parts of Excel regression outputs are given below. Model AR(1): Model AR(2): Using the AR(1)model,find the company revenue forecast for 2012.