Question

-QL18 > Discussions > (4.2) Discussion - Chapter 11 - Forecasting and Time Series - due Thursday/Sunday du This is a graded discussion: 25 points possible (4.2) Discussion - Chapter 11 - Forecasting and Time Series - due Thursday/Sunday Review the section on forecasting and time series in Chapter 11. Due Thursday: (This portion worth 15 points) • Discuss three or four forecasting issues that you encounter in your daily life. How do you make your forecasts? • Provide two examples each of time series that exhibit the following: (six examples total) 1. Trends 2. Seasonal patterns 3. Cyclical patterns Due Sunday: (This portion worth 10 points - 5 points for each response)

Answer 1

1)In day today's life there are many issues that one face and forecasting for the same is being done from before like:

a)Since I am foody and like to travel a lot hence I need to set aside a part of my Income beforehand only. So I had to forecast my expenditure in a certain way that I do not end up without money by the end of the month. Second I like to make makeup tutorials and post them on social media hence I need to set up a budget for that also as it requires a lot of things right from cosmetics to the shooting of video which includes attire, ambiance as I shoot at different places. A part of income I invest in Stocks and sharemarket hence I need to budget for that accordingly. The forecast is based on my average spending every month. Every month the salary I get I divide it into three parts one for my rent, electricity and other basic needs, another part for saving and others for my entertainment in whichever form I like. This budget varies as per the season or the ongoing trends as if it's monsoon season my expenditure increases as I travel a lot and in Winter it decreases as I don't feel like going anywhere. Hence I plan it accordingly. For example, I fix a place where I need to visit do the analysis and find an average budget required for traveling there and then I start setting aside the money for the same. In our daily life, we make many forecast right from groceries to shopping.

b)

i)Trends

It can be said as a general movement or overall movement of data in general direction or we can say it as general tendency of data to to increase or decrease during a long period of time. It is not necessary that it will increase or decrease in the same direction.A trend is a smooth, general, long-term, average tendency.For example if we see Admission in a particular university then we can see how it has elivated or decreased over a period of time.It may have few years of loss,stagnation and then profit.We can see trend in population or agriculture product as how over the period it increased or decreases.In which direction was the movement and what kind of trend followed .

ii)Seasonal Pattern:This type of pattern is said to exist when a series is influenced by seasonal factors and the seasonality is always fixed and known.Here we can say data experiences regular and predictable change that occurs in every calnder year.For example :During minsoon the sale of umbrella and Raincoat increases.It is a seasonal Patter and a known fact that during this time the sales of these product will rise.One example of seasonality that effect the product to a great extent is stock.it has a big impact on investors profit and investment.In peak season when the sales volume increases it will increase the organizations profit hence having a positive impact on stock and during low times it will have adverse effect on stock.

iii)Cyclical Patterns:. Cyclical trends can be said as the business cycle.Here the opportunities in  business creates new corporations or products that skim good profits, those profits kill off the competitors profits, affecting their sales and  consequently reducing supply, and then again the cycle repeats. For example mobile application,with advent of new one the market for old one is almost finished or lower down.Similar example could be network provider ,whenevr there is new entrant the sale of older one drops.