Deck 16: Time Series and Forecasting

Question 1

What time series component was exemplified during the 1980s when the World economy enjoyed a period of prosperity?

A) Irregular
B) Cyclical
C) Trend
D) Seasonal
E) Episodic

Answer 1

Cyclical

Question 2

Economic periods of prosperity followed by recession are described as:

A) secular trend.
B) seasonal variation.
C) cyclical variation.
D) episodic variation.
E) irregular variation.

Answer 2

cyclical variation.

Question 3

i. 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.
ii. Many business and economic time series have a recurring seasonal pattern.
iii. One component of a time series is cyclical variation. An example of cyclical variation is the business cycle that consists of periods of prosperity followed by periods of recession, depression, and recovery.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Answer 3

(ii) and (iii) are correct statements but not (i).

Question 4

Since a ski resort does most of its business in the winter, what is the major source of variation in income due to?

A) Secular trend
B) Seasonal variation
C) Cyclical variation
D) Episodic variation
E) Irregular variation

Question 5

For an annual time series extending from 1993 through 2001, how many years would be lost in a five-year moving average?

A) 2 at the start and 1 at the end
B) 1 at the start and 1 at the end
C) 2 at the start and 0 at the end
D) 0 at the start and 2 at the end
E) 2 at the start and 2 at the end

Question 6

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

A) Secular trend
B) Seasonal variation
C) Cyclical variation
D) Irregular or variation
E) Episodic variation

Question 7

i. A time series is a collection of data recorded over a period of time, usually monthly, quarterly, or yearly. ii. Long-term forecasts are usually from one year to more than 10 years into the future.
iii. A forecast is considered necessary in order to have the raw materials, production facilities, and staff available to meet estimated future demands.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 8

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

A) Prosperity, recession, depression, and recovery
B) Depression, recovery, recession, and prosperity
C) Recovery, depression, prosperity, and recession
D) Recession, recovery, prosperity, and depression
E) Recession, depression, and regression

Question 9

i. Long-term forecasts are usually from one year to more than 10 years into the future.
ii. A forecast is considered necessary in order to have the raw materials, production facilities, and staff available to meet estimated future demands.
iii. 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.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 10

The merchants in Morris, Manitoba suffered flood damage in May 1997. Stores were closed for remodeling nearly two months. What is this type of variation in sales called?

A) Secular trend
B) Seasonal variation
C) Cyclical variation
D) Episodic variation
E) Irregular variation

Question 11

A time series is a collection of data that:

A) records past performance.
B) records future performance.
C) has seasonality removed.
D) has irregular variation removed.
E) is limited to yearly data.

Question 12

i. Long-term forecasts are usually from one year to more than 10 years into the future.
ii. A forecast is considered necessary in order to have the raw materials, production facilities, and staff available to meet estimated future demands.
iii. Many business and economic time series have a recurring seasonal pattern.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 13

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

A) Secular trend
B) Seasonal variation
C) Cyclical variation
D) Episodic variation
E) Irregular variation

Question 14

If the exports ($ millions) for the period 1997 through 2001 were $878, $892, $864, $870, and $912 respectively, what are these values called?

A) Moving average
B) Linear trend equation
C) Logarithmic trend equation
D) Time series
E) Secular Trend

Question 15

The events on Sept 11, 2001 exerted an impact on the economy that could be classified as:

A) secular trend.
B) episodic variation.
C) residual variation.
D) seasonal variation.
E) cyclical variation.

Question 16

i. A time series is a collection of data recorded over a period of time, usually monthly, quarterly, or yearly.
ii. Episodic and residual variations can be projected into the future.
iii. A forecast is considered necessary in order to have the raw materials, production facilities, and staff available to meet estimated future demands.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 17

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

A) To develop plans for possible new plants.
B) To have raw materials available for future demand
C) To develop plans for future financing.
D) To have enough staff for future needs.
E) To develop plans for possible new plants and future financing, to have raw materials available for future demands and to have enough staff for future needs.

Question 18

i. Many business and economic time series have a recurring seasonal pattern.
ii. One component of a time series is cyclical variation. An example of cyclical variation is the business cycle that consists of periods of prosperity followed by periods of recession, depression, and recovery.
iii. Episodic and residual variations can be projected into the future.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 19

Which one of the following is not a component of a time series?

A) Secular trend
B) Moving average
C) Seasonal variation
D) Irregular variation
E) Cyclical variation

Question 20

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.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 21

In the linear trend equation, how is the average change in the dependent variable represented for every unit change in time?

A) a
B) b
C) t
D) ŷ
E) r

Question 22

The following linear trend equation was developed for annual sales from 1995 to 2001 with 1995 the base or zero year. ŷ = 500 + 60t ($000). What are the estimated sales for 2005 ($000)?

A) $500
B) $560
C) $600
D) $1,040
E) $1,100

Question 23

i. The moving average method averages out cyclical (C) and irregular (I) components. ii. To apply the moving average method to a time series, the data should follow a linear trend and have a definite rhythmic pattern of fluctuations that repeat (say, every three years).
iii. Sales, production and other economic and business series usually have periods of oscillation that are of equal length or identical amplitudes.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 24

i. In a time series analysis, the letter "a" in the linear trend equation, is the value of when t = 0. ii. In the linear trend equation, the letter "b" is the average change each change of one unit (either increase or decrease) in y.
iii. In the linear trend equation, t is any value that corresponds with a time period, (i.e. month or quarter.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 25

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

A) Provides quick approximations
B) Is subject to human error
C) Provides accurate forecasts
D) Is too difficult to calculate
E) Requires graph paper

Question 26

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.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 27

For a time series beginning with 1988 and extending up to 2001, which year would be coded with a one when using the coded method?

A) 1986
B) 1988
C) 1989
D) 1998
E) 1996

Question 28

How can you describe the moving average method?

A) Useful in smoothing out a time series.
B) Used in measuring seasonal fluctuations.
C) A technique which does not result in a trend line equation.
D) A method for identifying a trend.
E) A method for identifying a trend, but does not result in a trend line equation, is useful in smoothing out a time series and measuring seasonal fluctuations.

Question 29

i. The moving average method merely smooths out the fluctuations in the data. ii. To apply the moving average method to a time series, the data should follow a linear trend and have a definite rhythmic pattern of fluctuations that repeat (say, every three years).
iii. Sales, production and other economic and business series usually have periods of oscillation that are of equal length or identical amplitudes.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 30

i. The moving average method merely smooths out the fluctuations in the data. ii. The moving average method averages out cyclical (C) and irregular (I) components.
iii. Sales, production and other economic and business series usually have periods of oscillation that are of equal length or identical amplitudes.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 31

i. In the linear trend equation, t is any value that corresponds with a time period, i.e., month or quarter. 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. If the sales, production or other data over a period of time tend to approximate a straight-line trend, the equation developed by the least squares method cannot be used to forecast sales for a future period.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 32

If the least squares equation for sales data is ŷ = 10 + 1.3t ($ millions),with t = 0 in 1995, what is the value of t and the forecast for 2002?

A) t = 6, y = 17.8
B) t = 0, y = 10.0
C) t = 7, y = 19.1
D) t = 10, y = 0.0
E) t = 7, y = 9.1

Question 33

i. In a time series analysis, the letter "a" in the linear trend equation, is the value of when t = 0. ii. In the linear trend equation, t is any value that corresponds with a time period, i.e., month or quarter.
iii. If the sales, production or other data over a period of time tend to approximate a straight-line trend, the equation developed by the least squares method cannot be used to forecast sales for a future period.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 34

i. The moving average method merely smooths out the fluctuations in the data. ii. The moving average method averages out cyclical (C) and irregular (I) components.
iii. To apply the moving average method to a time series, the data should follow a linear trend and have a definite rhythmic pattern of fluctuations that repeat (say, every three years).

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 35

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.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 36

If you have annual data for 1991 to 2002 and want to code the years for the calculation of the trend, what should you code the year 1991?

A) 0
B) 1
C) 91
D) -6
E) -13

Question 37

The following linear trend equation was developed for the annual sales of the Jordan Manufacturing Company. ŷ = 500 + 60t ($000). How much are sales increasing?

A) $60,000 per year
B) $6,000 per month
C) $500,000 per year
D) $6,000 per year
E) $500 per month

Question 38

i. If the sales, production or other data over a period of time tend to approximate a straight-line trend, the equation developed by the least squares method cannot be used to forecast sales for a future period. ii. 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.
iii. If the past data approximates a straight line, the equation used is = a + bt, where a is they-intercept and b is the slope of the line.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 39

For a three-year moving average, how many values will be lost at the beginning and end of the time series?

A) 0 at the start and 2 at the end
B) 3 at the start and 0 at the end
C) 1 at the start and 1 at the end
D) 0 at the start and 3 at the end
E) 2 at the start and 0 at the end

Question 40

A linear trend equation is used to represent time series values when the dependent data are changing by equal?

A) Percents
B) Proportions
C) Amounts
D) Rights
E) Exponents

Question 41

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 2010?

A) $90,618.6 Million
B) $97,082.5 Million
C) $116,464.2 Million
D) $103,546.4 Million
E) $110,010.3 Million

Question 42

How will data which increases (or decreases)by equal percents appear when plotted on graph paper having an arithmetic scale?

A) Straight line
B) Linear
C) Curvilinear
D) Parabolic
E) Discontinuous

Question 43

What is Ln of the forecast for year 9?

A) 1.449
B) 28.122
C) 3.337
D) 19.325
E) 1.087

Question 44

A logarithmic straight-line trend equation should be used for forecasts when the time series is increasing by?

A) Equal amounts
B) Increasing percents
C) Increasing amounts
D) Increasing or decreasing percents
E) Constant percents

Question 45

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 2004?

A) $90,618.6 Million
B) $77,690.9 Million
C) $84,154.7 Million
D) $103,546.4 Million
E) $71,227.0 Million

Question 46

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 2009?

A) $90,618.6 Million
B) $97,082.5 Million
C) $84,154.7 Million
D) $103,546.4 Million
E) $71,227.0 Million

Question 47

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 2006?

A) $90,618.6 Million
B) $477,690.9 Million
C) $84,154.7 Million
D) $103,546.4 Million
E) $71,227.0 Million

Question 48

Given the trend equation ŷ = 25 + 0.6t (t = 0 in 2010), what would be the forecast value for 2014?

A) 2.4
B) 28.0
C) 3.0
D) 32.0
E) 27.4

Question 49

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 2005?

A) $90,618.6 Million
B) $77,690.9 Million
C) $84,154.7 Million
D) $103,546.4 Million
E) $71,227.0 Million

Question 50

What is the forecast for year 9?

A) 20.725
B) 20.025
C) 17.100
D) 28.122
E) 19.325

Question 51

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 2011?

A) $90,618.6 Million
B) $97,082.5 Million
C) $116,474.2 Million
D) $103,546.4 Million
E) $110,010.3 Million

Question 52

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

A) Ln a+Ln b(t)
B) Ln atLn b(t)
C) atb( )
D) ab(t)
E) at^b

Question 53

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?

A) $90,618.6 Million
B) $477,690.9 Million
C) $84,154.7 Million
D) $103,546.4 Million
E) $71,227.0 Million

Question 54

Which of the following is true for the exponential equation?

A) Ln a = SLn ŷ/n
B) Ln ŷ = Ln a+tLn b
C) Ln b = S(XLn)/t²
D) Ln ŷ =Ln a+bLn t
E) ŷ = a + bt

Question 55

Given a linear time series trend, = - 5.2 + 3.1t, what is the forecast for 2015 if the t = 0 in 2007?

A) 22.7
B) 33.1
C) 30.0
D) 21.7
E) 19.6

Question 56

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 2008?

A) $90,618.6 Million
B) $97,082.5 Million
C) $84,154.7 Million
D) $103,546.4 Million
E) $71,227.0 Million

Question 57

What is Log10 of the forecast for year 9? Log10:

A) 1.449
B) 28.122
C) 3.337
D) 19.325
E) 28.12

Question 58

i. In the linear trend equation, t is any value that corresponds with a time period, i.e., month or quarter. ii. 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.
iii. If the past data approximates a straight line, the equation used is = a + bt, where a is they-intercept and b is the slope of the line.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 59

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

A) the quarter's sales are 56% above the yearly average.
B) the quarter's sales are 56% of the year total sales.
C) the other three quarter percentages will total 44%.
D) the quarter's sales are 56% of the yearly average.
E) the quarter's sales are 56% below the yearly average.

Question 60

What is the forecast for year 9?

A) 20.725
B) 20.025
C) 17.100
D) 28.122
E) 19.325

Question 61

i. A typical monthly seasonal index of 107.0 indicates that sales (or whatever the variable is) are 107 percent above the annual average. ii. The ratio-to-moving average method removes the time series trend component, resulting in 12 numbers that are called specific seasonals.
iii. The total of the four typical quarterly indexes should equal 100.0.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 62

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.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 63

i. In the ratio-to-moving-average procedure, using the median or modified mean eliminates trend. ii. 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.
iii. Seasonal variation is quite common in the retail and wholesale industries.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 64

i. The irregular component of a time series is the easiest to measure. ii. The ratio-to-moving average method removes the time series trend component, resulting in 12 numbers that are called specific seasonals.
iii. 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.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are incorrect statements but (iii) is correct.
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 65

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. 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.
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.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 66

i. 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. 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.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 67

i. The cyclical component of a time series is described in terms relative to the seasonal index. ii. The irregular component of a time series is the easiest to measure.
iii. The ratio-to-moving average method removes the time series trend component, resulting in 12 numbers that are called specific seasonals.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 68

i. Each typical seasonal index is a percent with the average for the year equal to 100. ii. The ratio-to-moving-average method eliminates the seasonal, cyclical and irregular components from the original data (y).
iii. The trend component of a time series is obtained my minimizing the sum of the squares of the errors.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 69

A plastics manufacturing performed a quarterly time series analysis for demands over the last five years (periods 1 through 20). The analysis resulted in the following trend equation and seasonal indexes: = 920.0 + 22.6 t
Based on the seasonal indexes, which quarter is expect to have 21% more demand than predicted by the trend line?

A) 1
B) 2
C) 3
D) 4
E) 1 and 3

Question 70

i. The ratio-to-moving average method removes the time series trend component, resulting in 12 numbers that are called specific seasonals. ii. 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.
iii. In the ratio-to-moving-average procedure, using the median or modified mean eliminates trend.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (ii) is a correct statement but (i) and (iii) are incorrect.

Question 71

A plastics manufacturing performed a quarterly time series analysis for demands over the last five years (periods 1 through 20). The analysis resulted in the following trend equation and seasonal indexes: = 920.0 + 22.6 t
Using the trend line question and the seasonal indexes, predict demand for the third period of the next year, i.e., period 23.

A) 1439.8
B) 519.8
C) 629.0
D) 1195.2
E) 1742.2

Question 72

i. A typical monthly seasonal index of 107.0 indicates that sales (or whatever the variable is) are 107 percent above the annual average. ii. Each typical seasonal index is a percent with the average for the year equal to 100.
iii. The ratio-to-moving-average method eliminates the seasonal, cyclical and irregular components from the original data (y).

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 73

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.

A) Total sales for the spring season are typically 18.3% below the annual average.
B) Total sales for the spring season are typically 18.3% above the annual average.
C) Total sales for the spring season are typically 81.7% below the annual average.
D) Total sales for the spring season are typically 81.5% below the annual average.

Question 74

i. Using the ratio-to-moving-average method, dividing the actual sales for a month by the typical seasonal for that month results in a figure that includes only trend, cycle and irregular fluctuations. This procedure is called deseasonalizing the sales. ii. The reason for deseasonalizing a sales series is to remove trend and cyclical fluctuations so that we can study seasonal fluctuations.
iii. Knowing the seasonal pattern in the form of indexes allows the retailer to deseasonalize sales.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 75

In the calculation of 4-quarter seasonal indices the total of the quarterly means will be:

A) 4.0.
B) 1.0.
C) 100%.
D) a variable.
E) 4.0/total of the quarterly means.

Question 76

i. The reason for deseasonalizing a sales series is to remove trend and cyclical fluctuations so that we can study seasonal fluctuations. ii. Using the ratio-to-moving-average method, dividing the actual sales for a month by the typical seasonal for that month results in a figure that includes only trend, cycle and irregular fluctuations. This procedure is called deseasonalizing the sales.
iii. Knowing the seasonal pattern in the form of indexes allows the retailer to deseasonalize sales. This is accomplished by dividing the actual sales for a month by the typical index for that month.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 77

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.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 78

i. The ratio-to-moving-average method eliminates the seasonal, cyclical and irregular components from the original data (y). ii. The cyclical component of a time series is described in terms relative to the seasonal index.
iii. The irregular component of a time series is the easiest to measure.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) is a correct statement but not (ii) or (iii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question 79

A plastics manufacturing performed a quarterly time series analysis for demands over the last five years (periods 1 through 20). The analysis resulted in the following trend equation and seasonal indexes: = 920.0 + 22.6 t Based on the seasonal indexes, which quarter is expect to have 25% less demand than predicted by the trend line?

A) 1
B) 2
C) 3
D) 4
E) 1 and 3

Question 80

i. In the ratio-to-moving-average procedure, using the median or modified mean eliminates trend. ii. A typical seasonal index of 103.7 for January indicates that sales for January are below the annual average.
iii. The total of the four typical quarterly indexes should equal 100.0.

A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.