Time series Analysis

  1. Perform data analysis using Regression analysis, run regression with excel,test for fitness- R2 R and fisher
  2. Test for significance: state the hypothesis at 5% level of significance
  3. Predict sales using moving average 2 or 3 period
  4. Test for accuracy using MAD2 MAD3
  5. Compare and draw conclusions

  6.      

    Solution

    Regression Statistics

    1)
         

    ANOVA

    2)
         

    3)
         

    4)
         

    MAD = 140,979 / 12 = 11748.25

    Compare and Conclusion

    5)
         

  7. Two independent methodsof forecasting based on judgment and experience have been prepared each month for the past 10months.
    The forecasts and actula sales are as follows:

  8.      

    a) Compute a trachimg signal for the 10th month for each forecast using the cumulative error for months 1 to 10. Use action limits of ± 4 is there bias present? (Do not round your intermediate calculations. Round your answers to 2 decimal places. Negative amounts should be indicated by a miuns sign.)

          

    b) Compute 2s control limits for each forecast.(Don not round your intermediate calculation. Round your answers to 2 decimal places.)

          

    Answer : a) Method 1
          

    Mean Absolute Deviation    = 1.7
    Running Sum of forecast error  = 7
    Tracking Signal          = 4.12

    Formula's : Mean Absolute Deviation = sum( | Er | ) / No of Obs = 17 /10 =1.7
    Running Sum of forecast error = Sum( Er) = 7
    Tracking Signal : Running Sum of forecast error / Mean Absolute Deviation = 7 / 1.7 = 4.12
    Answer : Since 4.12 is greater than 4 hence their is Bias

    Method 2

          

    Mean Absolute Deviation    = 2
    Running Sum of forecast error  = 7
    Tracking Signal          = 3.50

    Answer : Since 3.50 is less than 4 hence their is no Bias

    Answer : b)
    Method 1

    mean = 778.7
    SD   = 778.7
    Control limit =778.7+10.83*2 = 800.36


    Method 2

    mean = 779.2
    Sd   = 10.99
    Control limit =779.2+10.99*2 = 801.18