14. Statistical Techniques in Business & Economics (18)

18 ­ © 2003 by The McGraw­Hill Companies, Inc. All rights reserved. Copyright © 2004 by The McGraw­Hill Companies, Inc. All rights reserved. 18 ­ 2 When you have completed this chapter, you will be able to:. 1. Define the four components of a time series 2. Determine a linear trend equation 3. Compute a moving average 4. Compute the trend equation for a nonlinear trend . Use trend equations to forecast future time periods and to . 5. develop seasonally adjusted forecasts. 6. Determine and interpret a set of seasonal indexes 7. Identify cyclical fluctuations 8. Deseasonalize data using a seasonal index 9. Compute and evaluate forecastsCopyright © 2004 by The McGraw­Hill Companies, Inc. All rights reserved. 18 ­ 3. is a collection of data recorded over a period of time .( data may be recorded weekly, monthly, or quarterly) is the long run direction of the Time Series is the fluctuation above and below . the trend line. is the pattern in a time series; . these patterns tend to repeat . themselves from year to year Copyright © 2004 by The McGraw­Hill Companies, Inc. All rights reserved. 18 ­ 4. Continued . is divided into two components: Episodic variations. are unpredictable, but can usually be identified, . such as a flood or hurricane Residual variations . are random in nature and cannot be identified .Copyright © 2004 by The McGraw­Hill Companies, Inc. All rights reserved. 18 ­ 5. Text Chart 18­1 Excel Secular Trend .Copyright © 2004 by The McGraw­Hill Companies, Inc. All rights reserved. 18 ­ 6. Text Chart 18­2 Excel. Secular Trend . almost constant .Copyright © 2004 by The McGraw­Hill Companies, Inc. All rights reserved. 18 ­ 7. Text Chart 18­3 Excel Secular Trend Increasing © 2004 by The McGraw­Hill Companies, Inc. All rights reserved. 18 ­ 8. Text Chart 18­4 Excel Secular Trend Declining ©