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Time Series Analysis: Solution

1. The document discusses techniques for time series analysis including regression analysis, moving averages, mean absolute deviation, and control charts. 2. It provides an example of comparing two forecasting methods using tracking signals and control limits to test for bias and accuracy. 3. The solutions show calculating tracking signals, mean absolute deviations, control limits, and comparing the results to analyze the forecasts.

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Hany
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97 views

Time Series Analysis: Solution

1. The document discusses techniques for time series analysis including regression analysis, moving averages, mean absolute deviation, and control charts. 2. It provides an example of comparing two forecasting methods using tracking signals and control limits to test for bias and accuracy. 3. The solutions show calculating tracking signals, mean absolute deviations, control limits, and comparing the results to analyze the forecasts.

Uploaded by

Hany
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Margin of Error Manova Decision Tree Linear Regression Apply Family MDS Relative Risk Vector Machine Exponential

Skewness Cluster Analysis Corres. Analysis Survival Analysis Python Hyper-Geometric Hypothesis Coding with R

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

Solution
Regression Statistics
1)

ANOVA
2)

3)

4)

MAD = 140,979 / 12 = 11748.25

Compare and Conclusion

5)

6. 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:

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

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