BUSINESS STATISTICS II

Problems on Time Series

Free Hand Method

1. Plot the following data on a graph and ascertain trend by free hand method.
Year : 1968 1969 1970 1971 1972 1973
Production : 100 120 95 105 108 102

2. Draw a time series graph relating to the following data and show free hand trend.
Year Production Year Production
1951 165 1963 280
1952 178 1964 351
1953 236 1965 320
1954 213 1966 370
1955 180 1967 366
1956 163 1968 325
1957 180 1969 256
1958 187 1970 304
1959 210 1971 291
1960 237 1972 277
1961 203 1973 274
1962 215 1974 272

Semi-Averages Method

3. Using the method of simple semi-average determine the trend of the following on a graph
sheet.
Year : 1991 1992 1993 1994 1995 1996 1997 1998 1999
Sales : 16 14 20 18 19.5 12 23 28 25

4. Fit a trend line from the following data by using semi-averages method.
Year : 1973 1974 1975 1976 1977 1978
Production : 100 120 140 150 130 200

5. Fit a straight line by the semi-average method to the following data :

Year : 1963 1964 1965 1966 1967 1968
Sales : 20 24 22 30 28 32

Odd Period Moving Average

6. Calculate the 3 yearly moving averages to determine trend component of the following
time series :
Year : 1973 1974 1975 1976 1977 1978 1979
Sales : 2 6 1 5 3 7 2
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7. Using three years moving averages, determine the trend and short term fluctuations.
Plot the original and trend values on the same graph paper.
Year : 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977
Production : 21 22 23 25 24 22 25 26 27 26

8. Calculate the trend values by 5 yearly moving averages method and plot the same on a
graph from the following :
Year : 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Consumption : 12 14 18 24 22 20 16 25 26 34 31

9. Draw a graph to represent the following data :

Year : 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Students
In
College : 705 685 703 687 705 689 715 685 725 730
Calculate the 5 yearly Moving Averages of the above data and plot them on the graph.

Even Period Moving Averages

10. Assume a four yearly cycle, calculate the trend by the method of moving average for the
following data :
Year : 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970
Sales : 500 520 550 470 510 540 560 570 590 610

11. Compute 4 yearly moving average for the following data and show the original data and
trend values on a graph.
Year : 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987
Sales : 10 12 11 13 16 15 14 16 20 22 24 30

Determining the Period of Moving Average

12. The following data give daily sales of a shop observing a five day week, over four
successive weeks. Determine the period of moving average and calculate the moving
averages accordingly.
Day : 1 2 3 4 5 6 7 8 9 10
Sales : 26 29 35 47 51 26 32 47 46 53
Day : 11 12 13 14 15 16 17 18 19 20
Sales : 21 30 36 46 54 28 31 36 46 54

13. Determine the period of moving average for the following data and calculate moving
average for that period.
Year : 1 2 3 4 5 6 7 8 9
Value : 130 127 124 135 140 132 129 127 145
Year : 10 11 12 13 14 15
Value : 158 153 146 145 164 170
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Least Squares -- Odd number of years

14. Construct a straight line trend for the following data by the method of least squares.
Year : 1 2 3 4 5
Items : 89 92 71 90 169

15. Calculate the trend values by the method of least squares from the data given below and
estimate the sales for the year 1985.
Year : 1976 1977 1978 1979 1980
Sales : 9 12 14 16 20

16. Fit a straight line to the following data and compute the trend values.
Year : 1960 1961 1962 1963 1964 1965 1966
Sales : 3 7 6 8 9 7 10

17. Fit a straight line trend by method of least squares to the following data :
Year : 1981 1982 1983 1984 1985 1986 1987
Profit : 57 65 63 72 69 78 82

18. Fit a straight line to the following data and compute the trend values.
Year : 1991 1993 1994 1995 1996 1997 2000
Profits : 79 88 91 92 90 94 96

19. Fit a straight line trend by the method of least squares from the following data and
estimate 1986 sales.
Year : 1979 1980 1981 1982 1983 1984 1985
Sales : 100 105 96 102 108 109 112

20. The following data relate to profits earned by a company.

Year : 1996 1997 1998 1999 2000 2001 2002
Profits : 85 92 105 127 182 175 200

Fit a straight line trend equation by the method of least squares and estimate the value
for the year 2005.

21. Fit a trend line to the following data by the method of least squares.
Year : 1986 1988 1990 1992 1994 1996 1998
Production : 25 27 32 36 44 55 69

Least Squares -- Even number of years

22. Calculate the sales for 2004 for the data given below :
Year : 1998 1999 2000 2001 2002 2003
Sales : 125 130 135 145 155 160
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23. Fit a straight line trend by the method of least squares to the following data. Assuming
that the same rate of change continues, what would be the predicted earnings for 1985.

Year : 1977 1978 1979 1980 1981 1982 1983 1984

Earnings : 38 40 65 72 69 60 87 95

24. Fit a trend equation Y = a + bX.

Years : 1997 1998 1999 2000 2001 2002 2003 2004
Production : 20 37 46 55 62 57 60 82

25. The sales of a company in lakhs of rupees for the years 1964 - 1971 are given below :
Year : 1964 1965 1966 1967 1968 1969 1970 1971
Sales : 550 560 555 585 540 525 545 585
(i) Find the linear trend equation (ii) Estimate the sales for the year 1963.

Second Degree (Parabolic) Trend

1. Fit an equation of the form Y = a + bX + cX2 to the data given below :

X : 1 2 3 4 5
Y : 25 28 33 39 46

2. Fit a second degree parabola to the following data :

Year : 1995 1996 1997 1998 1999
Sales : 50 80 60 100 70

3. Fit a second degree parabola to the following data and calculate the trend values :
Year : 1996 1997 1998 1999 2000
Sales : 12 10 14 20 28

Shifting of Origin and Trend Conversion

4. The straight line trend equation is y = 45 + 2.5 x, where the year of origin = 1996, x unit
= 1 year and y unit = annual value. Revise the above equation by shifting the origin to
1999.

5. Given the trend equation Y = 34.5 + 2.1 x, (1999 = 0), change the base year to 2003
and rewrite the trend equation.

6. The trend equation of a phenomenon is Y = 88 + 0.6 S. The origin is 1997. Time is one
year. Shift the origin to 2001.

7. The trend equation of a time series is fitted as Y = 60 + 1.5 x. Shift the trend origin from
1998 to 1993, given that time unit is one year.
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8. Given the following equation Y = 80 + 6 x. Origin 1980; X unit = 1 year, change the
origin to 1st January 1981.

9. Shift the trend origin from 1997 to 1 st January 1998 in the linear equation Y = 14.5 +
0.4 X, given that unit of time = 1 year.

10. Given the trend equation Y = 35 + 5X + 3X2 (origin 1968, X unit = 1 year), change the
origin of the equation to 1974.

11. Given an equation Y = 140 + 80X (X unit = 1 year) convert the equation into a quarterly
trend.

12. Given an equation Y = 160 + 24 X (X unit = 1 year) convert the equation into a
quarterly trend.

13. Given Y = 300 + 24 X (origin 1991) X unit = 1 year, Y units = annual profits (Rs.
000) Convert into monthly trend equation.

14. Convert the following monthly trend equation into an annual one : Y = 3 + 0.0135 X.

Seasonal Variations

1. Given the seasonal averages, calculate seasonal index numbers by applying simple
average method. Summer: 45.6, Monsoon : 177.75 ; Autumn : 102.40 , Winter
209.6.

2. Find seasonal indices by the simple average method from the following data :

Year Quarters
I II III IV
1998 6.0 6.5 8.8 8.7
1999 6.4 7.9 8.4 8.3
2000 6.8 6.6 9.2 7.0
2001 7.2 6.8 7.5 8.5

3. Calculate the Seasonal Index from the following data using the average method :

Year Quarters
I II III IV
1992 72 68 80 70
1993 76 70 82 74
1994 74 66 84 80
1995 76 74 84 78
1996 78 74 86 82
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4. From the following data relating to the number of letters posted in a post office, find the
seasonal variations within the 5 weeks by using the method of simple averages.

Weeks / Days Sun Mon Tue Wed Thu Fri Sat

1st 18 161 170 164 153 181 76
2nd 18 165 179 157 168 195 85
3rd 21 162 169 153 139 185 82
4th 24 171 182 170 162 179 95
5th 27 162 186 170 170 182 120

5. Consumption of monthly electric power in millions of kw/hour for street lighting in India
during 1971 - 75 is given below :

Year : Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

1971 : 400 380 375 340 330 315 325 350 370 400 420 445
1972 : 450 410 395 370 350 335 340 358 389 420 445 460
1973 : 470 435 425 398 370 350 350 380 400 450 470 490
1974 : 500 460 435 410 380 375 385 410 420 460 490 510
1975 : 525 475 500 435 420 390 415 435 460 450 465 490

Find out the seasonal variations by method of monthly averages.

6. Calculate Seasonal Index Numbers from the following data :

Ratio of observed to Trend Values %

Year Quarter I Quarter II Quarter III Quarter IV

1991 108 130 107 93
1992 86 120 110 91
1993 92 118 104 88
1994 78 100 94 78
1995 82 110 98 86
1996 106 118 105 98

7. Calculate the seasonal index by the ‘ratio to moving average’ method from the following
data :

Year Quarter Y 4 Yearly Moving Average

1972 I 75 ----
II 60 ----
III 54 63.375
IV 59 65.375
1973 I 86 67.125
II 65 70.875
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III 63 74.000
IV 80 75.375
1974 I 90 76.625
II 72 77.625
III 66 79.500
IV 85 81.500
1975 I 90 76.625
II 72 77.625
III 72 ----
IV 93 ----

8. Calculate Seasonal Index by “Ratio to Moving Average” method from the following data
:

Year Q1 Q2 Q3 Q4
1996 290 280 285 310
1997 320 305 310 330
1998 340 321 320 340
1999 370 360 362 380

9. Calculate Seasonal Indices from the following data :

Q1 Q2 Q3 Q4
1987 --- --- 85.21 90.25
1988 128.12 91.71 96.10 103.90
1989 112.33 100.35 78.13 97.88
1990 105.26 103.50 --- ---

10. From the following relatives, find the link relatives :

Year : 1998 1999 2000 2001 2002 2003
Price Relatives : 150 210 220 250 260 280

11. Deseasonalize the following data using a multiplicative model :

Quarter I II III IV
Sales 65.4 25.2 23.7 21.4
Seasonal Index 148 124 78 50

12. The seasonal indices of the sale of garments of a particular type are given below :

Quarter I II III IV
Seasonal Index 98 89 83 130
 If the total sales in the first quarter of a year the worth Rs. 10,000, find how much worth
of garments of the type should be kept in stock to meet the demand in each of the
remaining quarters.
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13. Given below are the seasonal indices of sales of a readymade garments dealer :

Quarter I II III IV
Seasonal Index 80 90 110 120

If the total sales in the first quarter is expected to be Rs. 20,000, find the value of stocks
to be kept in store in each of the remaining quarters.

14. The seasonal indices of the sales of readymade garments in a store are given below :

Quarter Seasonal Index

January to March 98
April to June 90
July to September 82
October to December 130

If the total sales of the garments in the first quarter is worth Rs. 1,00,000, determine
how much worth of garments of this type should be kept in stock to meet the demand in
each of the remaining three quarters.

15. The seasonal indices for November and December 2003 were 140 and 190 for
woollen products. The sales of woollen garments in a shop rose from Rs. 80,000 in
November to Rs. 95,000 in December. The shop proprietor was not satisfied with this
rise. Why ?

16. The sale of a company rise from Rs. 60,000 in the month of August to Rs. 69,000 in
the month of September. The seasonal indices for these two months are 105 and 140
respectively. The owner of the company was not at all satisfied with the rise of sale in
the month of September by Rs. 9,000. He expected much more because of the seasonal
index for that month. What was his estimate of sales for the month of September.

17. Deseasonalize the following data using suitable method :

Month Cash Balance of a Bank (Rs. In Lakhs) Seasonal Indices
Jan 360 120
Feb 400 80
Mar 550 110
Apr 360 90
May 350 70
Jun 550 100

18. The seasonal indices of sales of a firm are as under :

Month : Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
S.I. : 106 105 101 104 98 96 93 89 92 102 106 108
If the firm is expecting average monthly sales of Rs. 42,00,000 during 1986, estimate
the sales for individual months of 1986.