Probability and Statistics

Homework #1 Forecasting and Trends.

Amanzhol Yerassyl
Cs 2008
Part 1.
A time series is a chronological sequence of dates that represents some information. Using dates from time
series, we can create tables and graphs. From the information provided and the presented schedule, we can
make some predictions and forecasts for the future. The time series date can be collected annually, quarterly,
monthly, weekly, daily, etc. The examples of time series information in real life are weather temperature,
annual profit for a company, electricity consumption in the home, quarterly house sales, etc. The time series
data has 4 aspects of behavior: trends, seasonality, cycles, and unexplained variation. I believe that in my
future projects I will be able to use a time series chart, analyze risks and predict future position.
Trend is an overall long-term direction of the series.
Seasonality occurs when there is repeating behavior in the date which occurs at regular intervals.
Cycles occur when a series follows up and down patterns that is not seasonal.
Irregular the variability in the observations that cannot be explained by the model.
Part 2.

T Year Quarter Sales MA (4) CMA (4) St, It St De-seasonalize Tt Forecast

1 1980 1 39       0.7 55.71 48.94 34.26
2   2 47       0.99 47.47 45.84 45.38
3   3 48 42.8 41.1 1.17 1.23 39.02 42.74 52.57
4   4 37 39.5 37.4 0.99 0.98 37.76 39.64 38.85
5 1981 1 26 35.3 33.6 0.77 0.7 37.14 36.54 25.58
6   2 30 32.0 30.4 0.99 0.99 30.30 33.44 33.11
7   3 35 28.8 27.3 1.28 1.23 28.46 30.34 37.32
8   4 24 25.8 24.6 0.97 0.98 24.49 27.24 26.70
9 1982 1 14 23.5 22.6 0.62 0.7 20.00 24.14 16.90
 10   2 21 21.8 21.0 1.00 0.99 21.21 21.04 20.83
11   3 28 20.3     1.23 22.76 17.94 22.07
12   4 18       0.98 18.37 14.84 14.55
13 1983 1         0.7   11.74 8.22
14   2         0.99   8.65 8.56
15   3         1.23   5.55 6.82
16   4         0.98   2.45 2.40

MA = average of 4 upper quarters

CMA = average of 2 upper MA
St, It = Yt / CMA
St = average of every quarter by years
Deseasonalize = Yt / St
Forecast = St * Tt
Yt = St * It * Tt
Part 3.

60

50

40
sales of linoleum

30
Sales
CMA(4)
Forecast
20

10

0
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
1980 1981 1982 1983

Axis Title

After all calculations with the table, we get a graph, which clearly shows that the central moving average is
decreasing, and linoleum sales are go down. Our forecasts are almost in line with actual sales over the past
three years. And we assume that next year, 1983, sales will also fall, and linoleum sales will decrease. All of
the numbers are written in the table. Having analyzed all the material, I recommend that this company close
the production of linoleum, because next year sales may fall and the company may go completely bankrupt.

References
1. https://medium.com/swlh/time-series-analysis-7006ea1c3326
2. Excel file in documentation
3. https://www.youtube.com/watch?v=gHdYEZA50KE
4. https://moodle.astanait.edu.kz/pluginfile.php/63826/mod_resource/content/1/
newbold_p_carlson_wl_thorne_bm_statistics_for_business_and_e.pdf