Decision science April 2023 - 77121744106

1) Smoothening techniques can spot simplified alterations that can be used to forecast various
trends and patterns. It serves as a tool for statisticians who must examine a large amount of data
which is frequently difficult to comprehend, in order to spot patterns they might not otherwise see.

There are multiple varieties of smoothening techniques which includes

1) Naïve Forecasting
2) Average models Forecasting and,
3) Exponential smoothness.

These methods are employed to predict time series data that are just stagnant, lack a discernible
trend cycle, or exhibit seasonal influence. Based on these procedures, forecasts are produced.
spreading out. That is the time series data's irregular functional fluctuation effect.

As per question, we will be concentrating more on Exponential smoothening technique. The weights
for the newest to oldest observations are exponentially decreasing after exponential smoothing of
time series data. In other words, current data is considered more relevant and is allocated greater
weight; older data is given less priority ("weight"). The weights for the observations are determined
by the smoothing parameters (smoothing constants), which are typically denoted as α. This value is
generally determined by the interpreter.

The formula for Exponential Smoothing is as follows:

Ft+1 = α. Xt + (1-α) . Ft
Where,

Ft+1 = The forecast for the next time period (t+1)

Ft = The forecast for the present time period (t)
Xt = The actual value for the present time period
α = A value between 0 and 1 referred to as constant for exponential smoothing.
Explanation for table

As per the table provided in Q1, below is the calculations and findings.

An example of calculation of forecasting is as follows: α = .2 for year 3

F3 = 0.2(2.54) + (1-0.2). (1.68) = 1.85

Error is calculated as follows

et = xt - Ft
= 2.38 – 1.85
= 0.53

All the calculations are done based on the above formulas.

Table 1:

FTAs in India
Year (in Million) α = .2 α = .4 α = .6 α = .8
- - Forecast Error Forecast Error Forecast Error Forecast Error
1991 1.68 - - - - - - - -
2001 2.54 1.68 0.86 1.68 0.86 1.68 0.86 1.68 0.86
2002 2.38 1.85 0.53 2.02 0.36 2.20 0.18 2.37 0.01
2003 2.73 1.96 0.77 2.17 0.56 2.31 0.42 2.38 0.35
2004 3.46 2.11 1.35 2.39 1.07 2.56 0.90 2.66 0.80
2005 3.92 2.38 1.54 2.82 1.10 3.10 0.82 3.30 0.62
2006 4.45 2.69 1.76 3.26 1.19 3.59 0.86 3.80 0.65
2007 5.08 3.04 2.04 3.74 1.34 4.11 0.97 4.32 0.76
2008 5.28 3.45 1.83 4.27 1.01 4.69 0.59 4.93 0.35
2009 5.17 3.82 1.35 4.68 0.49 5.04 0.13 5.21 -0.04
2010 5.78 4.09 1.69 4.87 0.91 5.12 0.66 5.18 0.60
2011 6.31 4.43 1.88 5.24 1.07 5.52 0.79 5.66 0.65
2012 6.58 4.80 1.78 5.67 0.91 5.99 0.59 6.18 0.40
2013 6.97 5.16 1.81 6.03 0.94 6.34 0.63 6.50 0.47
2014 7.68 5.52 2.16 6.41 1.27 6.72 0.96 6.88 0.80
2015 8.03 5.95 2.08 6.92 1.11 7.30 0.73 7.52 0.51
2016 8.8 6.37 2.43 7.36 1.44 7.74 1.06 7.93 0.87
2017 10.04 6.85 3.19 7.94 2.10 8.37 1.67 8.63 1.41
MSE 3.30 1.24 0.69 0.46
MAD 1.71 1.04 0.75 0.60

MSE (Mean Square Deviation) = ∑ e1 2

Number of Forecasts

(If α = .2) = (0.86)2 + (0.53)2 + (0.77)2 + (1.35)2 + (1.54)2 + (1.76)2 + (2.04)2 +

(1.83)2 + (1.35)2 + (1.69)2 + (1.88)2 + (1.78)2 + (1.81)2 + (2.16)2 +
(2.08)2 + (2.43)2 + (3.19)2
17
= 56.16
17
= 3. 30

(If α = .4) = (0.86)2 + (0.36)2 + (0.56)2 + (1.07)2 + (1.10)2 + (1.19)2 + (1.34)2 +

(1.01)2 + (0.49)2 + (0.91)2 + (1.07)2 + (0.91)2 + (0.94)2 + (1.27)2 +
(1.11)2 + (1.44)2+ (2.10)2
17
= 21.06
17
= 1. 24
(If α = .6) = (0.86)2 + (0.18)2 + (0.42)2 + (0.90)2 + (0.82)2 + (0.86)2 + (0.97)2 +
(0.59)2 + (0.13)2 + (0.66)2 + (0.79)2 + (0.59)2 + (0.63)2 + (0.96)2 +
(0.73)2 + (1.06)2 + (1.67)2
17
= 11.65
17
= 0. 69

(If α = .8) = (0.86)2 + (0.01)2 + (0.35)2 + (0.80)2 + (0.62)2 + (0.65)2 + (0.76)2 +

(0.35)2 + (-0.04)2 + (0.60)2 + (0.65)2 + (0.40)2 + (0.47)2 + (0.80)2 +
(0.51)2 + (0.87)2 + (1.41)2
17
= 7.86
17
= 0. 46

MAD (Mean Absolute deviation) = ∑ |ei|

Number of Forecasts

(If α = .2) = |0.86| + |0.53| + |0.77| + |1.35| + |1.54| + |1.76| + |2.04| +

|1.83| + |1.35| + |1.69| + |1.88| + |1.78| + |1.81| + |2.16| +
|2.08| + |2.43| + |3.19|
17
= 29.06
17
= 1. 71

(If α = .4) = |0.86| + |0.36| + |0.56| + |1.07| + |1.10| + |1.19| + |1.34| +

|1.01| + |0.49| + |0.91| + |1.07| + |0.91| + |0.94| + |1.27| +
|1.11| + |1.44| + |2.10|
17
= 17.75
17
= 1. 04

(If α = .6) =|0.86| + |0.18| + |0.42| + |0.90| + |0.82| + |0.86| + |0.97| +

|0.59| + |0.13| + |0.66| + |0.79| + |0.59| + |0.63| + |0.96| +
|0.73| + |1.06| + |1.67|
17
= 12.82
17
= 0. 75
(If α = .8) = |0.86| + |0.01| + |0.35| + |0.80| + |0.62| + |0.65| + |0.76| +
|0.35| + |-0.04| + |0.60| + |0.65| + |0.40| + |0.47| + |0.80| +
|0.51| + |0.87| + |1.41|
17
= 10.18
17
= 0. 60

α = .8 produces smallest measurement of MSE and MAD errors as per the table 1. The value of 0.46
MSE and 0.60 MAD are lowest compared to all other errors at different alpha level. The actual values
are generally increasing hence the largest exponential smoothing value with the largest alpha gives
better forecasting results.

Q2.
•Correlations between Migration of Persons from other states (Census of India) & Total
MSMEs
In Migration of
Persons from
Total other states
MSMEs (Census of India)
x y x^2 y^2 xy
6,061 81,267 36,735,721 6,604,325,289 492,559,287
641929 1591890 412,072,841,041 2,534,113,772,100 1,021,880,355,810
60,932 136010 3,712,708,624 18,498,720,100 8,287,361,320
20,189 495699 407,595,721 245,717,498,601 10,007,667,111
902520 1111954 814,542,350,400 1,236,441,698,116 1,003,560,724,080
11,209 633966 125,641,681 401,912,889,156 7,106,124,894
69,758 1267668 4,866,178,564 1,606,982,158,224 88,429,984,344
163821 6330065 26,837,320,041 40,069,722,904,225 1,036,997,578,365
8,620 269689 74,304,400 72,732,156,721 2,324,719,180
807378 3916075 651,859,234,884 15,335,643,405,625 3,161,752,801,350
185486 3626318 34,405,056,196 13,150,182,237,124 672,631,220,548
14,674 395504 215,326,276 156,423,414,016 5,803,625,696
9,399 155187 88,341,201 24,083,004,969 1,458,602,613
157813 2195521 24,904,942,969 4,820,312,461,441 346,481,755,573
332872 3247660 110,803,768,384 10,547,295,475,600 1,081,055,079,520
125934 654423 15,859,372,356 428,269,462,929 82,414,106,082
934293 2744332 872,903,409,849 7,531,358,126,224 2,564,010,177,276
1692859 9087380 2,865,771,593,881 82,580,475,264,400 15,383,653,019,420
34,423 20,100 1,184,942,929 404,010,000 691,902,300
2,208 107915 4,875,264 11,645,647,225 238,276,320
3,238 41,380 10,484,644 1,712,304,400 133,988,440
1,543 108020 2,380,849 11,668,320,400 166,674,860
119291 855096 14,230,342,681 731,189,169,216 102,005,256,936
10,539 339967 111,070,521 115,577,561,089 3,582,912,213
 203394 2488299 41,369,119,236 6,191,631,913,401 506,105,086,806
572546 2604298 327,808,922,116 6,782,368,072,804 1,491,080,402,708
875 61,163 765,625 3,740,912,569 53,517,625
1032490 1650771 1,066,035,600,100 2,725,044,894,441 1,704,404,549,790
5,936 87,378 35,236,096 7,634,914,884 518,675,808
887413 4061933 787,501,832,569 16,499,299,696,489 3,604,612,149,329
40,443 1250575 1,635,636,249 1,563,937,830,625 50,577,004,725
231190.00 2381045 53,448,816,100 5,669,375,292,025 550,473,793,550
Totals
∑x ∑y ∑x2 ∑y2 ∑xy
9,291,276 53,998,548 8,132,866,747,168 221,081,999,514,428 34,492,991,653,879

r= ∑xy –(∑x∑y)
n

∑x2 – (∑x)2 ∑y2 – (∑y)2

N n

As per formula
r = 34,492,991,653,879 - (9,291,276* 53,998,548)
32

8,132,866,747,168 - (9,291,276)2 221,081,999,514,428 – (53,998,548)2

32 32

= 0.7079

It shows a strong positive correlation.

• Correlations between Migration of Persons from other states (Census of India) & Active
Companies

In Migration of
Active Persons from
Companies other states (Census of
India)
x y x^2 y^2 xy
319 81,267 101,761 6,604,325,289 25,924,173
116210 1591890 13,504,764,100 2,534,113,772,100 184,993,536,900
237 136010 56,169 18,498,720,100 32,234,370
6,346 495699 40,271,716 245,717,498,601 3,145,705,854
20,867 1111954 435,431,689 1,236,441,698,116 23,203,144,118
7,956 633966 63,297,936 401,912,889,156 5,043,833,496
7,109 1267668 50,537,881 1,606,982,158,224 9,011,851,812
40,069,722,904,22
216531 6330065 46,885,673,961 5 1,370,655,304,515
4,125 269689 17,015,625 72,732,156,721 1,112,467,125
15,335,643,405,62
62,619 3916075 3,921,139,161 5 245,220,700,425
 13,150,182,237,12
30,868 3626318 952,833,424 4 111,937,184,024
3,344 395504 11,182,336 156,423,414,016 1,322,565,376
2,745 155187 7,535,025 24,083,004,969 425,988,315
9,554 2195521 91,278,916 4,820,312,461,441 20,976,007,634
10,547,295,475,60
68,333 3247660 4,669,398,889 0 221,922,350,780
31,244 654423 976,187,536 428,269,462,929 20,446,792,212
22,315 2744332 497,959,225 7,531,358,126,224 61,239,768,580
82,580,475,264,40
231912 9087380 53,783,175,744 0 2,107,472,470,560
434 20,100 188,356 404,010,000 8,723,400
560 107915 313,600 11,645,647,225 60,432,400
66 41,380 4,356 1,712,304,400 2,731,080
235 108020 55,225 11,668,320,400 25,384,700
15,204 855096 231,161,616 731,189,169,216 13,000,879,584
1,282 339967 1,643,524 115,577,561,089 435,837,694
16,909 2488299 285,914,281 6,191,631,913,401 42,074,647,791
37,022 2604298 1,370,628,484 6,782,368,072,804 96,416,320,556
2 61,163 4 3,740,912,569 122,326
76,675 1650771 5,879,055,625 2,725,044,894,441 126,572,866,425
317 87,378 100,489 7,634,914,884 27,698,826
16,499,299,696,48
70,863 4061933 5,021,564,769 9 287,840,758,179
4,792 1250575 22,963,264 1,563,937,830,625 5,992,755,400
135844 2381045 18,453,592,336 5,669,375,292,025 323,450,676,980
Total
∑y2
∑x ∑y ∑x2 221,081,999,514,4 ∑xy
1,202,839 53,998,548 157,175,027,023 28 5,284,097,665,610

r= ∑xy –(∑x∑y)
n

∑x2 – (∑x)2 ∑y2 – (∑y)2

N n

As per formula
r = 5,284,097,665,610 - (1,202,839* 53,998,548)
32

157,175,027,023 - (1,202,839)2 221,081,999,514,428 – (53,998,548)2

32 32

= 0.8531

It shows a strong positive correlation.

 • Correlation between "In Migration of Persons from other states (Census of India) & 2017-
18 GSDP -CURRENT PRICES (` in Crore)"

2017-18
GSDP - In Migration of
CURRENT Persons from
PRICES other states
(` in Crore)" (Census of India)
x y x^2 y^2 xy
7,871 81,267 61,952,641 6,604,325,289 639,652,557
1546313 1591890 2,391,083,893,969 2,534,113,772,100 2,461,560,201,570
22,432 136010 503,194,624 18,498,720,100 3,050,976,320
288691 495699 83,342,493,481 245,717,498,601 143,103,840,009
484740 1111954 234,972,867,600 1,236,441,698,116 539,008,581,960
38,760 633966 1,502,337,600 401,912,889,156 24,572,522,160
484740 1267668 234,972,867,600 1,606,982,158,224 614,489,386,320
40,069,722,904,22
686824 6330065 471,727,206,976 5 4,347,640,563,560
70,494 269689 4,969,404,036 72,732,156,721 19,011,456,366
15,335,643,405,62
1328068 3916075 1,763,764,612,624 5 5,200,813,893,100
13,150,182,237,12
649592 3626318 421,969,766,464 4 2,355,627,162,256
138351 395504 19,140,999,201 156,423,414,016 54,718,373,904
137427 155187 18,886,180,329 24,083,004,969 21,326,883,849
276243 2195521 76,310,195,049 4,820,312,461,441 606,497,307,603
10,547,295,475,60
1357579 3247660 1,843,020,741,241 0 4,408,955,015,140
701577 654423 492,210,286,929 428,269,462,929 459,128,125,071
724729 2744332 525,232,123,441 7,531,358,126,224 1,988,896,986,028
82,580,475,264,40 21,915,125,608,00
2411600 9087380 5,815,814,560,000 0 0
23,835 20,100 568,107,225 404,010,000 479,083,500
30,790 107915 948,024,100 11,645,647,225 3,322,702,850
18,737 41,380 351,075,169 1,712,304,400 775,337,060
24,492 108020 599,858,064 11,668,320,400 2,645,625,840
434769 855096 189,024,083,361 731,189,169,216 371,769,232,824
32,962 339967 1,086,493,444 115,577,561,089 11,205,992,254
478636 2488299 229,092,420,496 6,191,631,913,401 1,190,989,480,164
835170 2604298 697,508,928,900 6,782,368,072,804 2,175,031,560,660
23,495 61,163 552,015,025 3,740,912,569 1,437,024,685
1461841 1650771 2,136,979,109,281 2,725,044,894,441 2,413,164,729,411
44,219 87,378 1,955,319,961 7,634,914,884 3,863,767,782
16,499,299,696,48
1460443 4061933 2,132,893,756,249 9 5,932,221,616,319
222836 1250575 49,655,882,896 1,563,937,830,625 278,673,130,700
999585 2381045 999,170,172,225 5,669,375,292,025 2,380,056,866,325
Total
 ∑y2 ∑xy
2
∑x ∑y ∑x 221,081,999,514,4 59,929,802,686,14
17,447,841 53,998,548 20,839,870,930,201 28 7

r= ∑xy –(∑x∑y)
n

∑x2 – (∑x)2 ∑y2 – (∑y)2

N n

As per formula
r = 59,929,802,686,147- (17,447,841* 53,998,548)
32

20,839,870,930,201- (17,447,841)2 221,081,999,514,428 – (53,998,548)2

32 32

= 0.7946

It shows a strong positive correlation.

• Correlation between Total MSMEs & Active Companies

Total MSMEs Active Companies

x y x^2 y^2 xy
6,061 319 36,735,721 101,761 1,933,459
641929 116210 412,072,841,041 13,504,764,100 74,598,569,090
60,932 237 3,712,708,624 56,169 14,440,884
20,189 6,346 407,595,721 40,271,716 128,119,394
902520 20,867 814,542,350,400 435,431,689 18,832,884,840
11,209 7,956 125,641,681 63,297,936 89,178,804
69,758 7,109 4,866,178,564 50,537,881 495,909,622
163821 216531 26,837,320,041 46,885,673,961 35,472,324,951
8,620 4,125 74,304,400 17,015,625 35,557,500
807378 62,619 651,859,234,884 3,921,139,161 50,557,202,982
185486 30,868 34,405,056,196 952,833,424 5,725,581,848
14,674 3,344 215,326,276 11,182,336 49,069,856
9,399 2,745 88,341,201 7,535,025 25,800,255
157813 9,554 24,904,942,969 91,278,916 1,507,745,402
332872 68,333 110,803,768,384 4,669,398,889 22,746,142,376
125934 31,244 15,859,372,356 976,187,536 3,934,681,896
934293 22,315 872,903,409,849 497,959,225 20,848,748,295
1692859 231912 2,865,771,593,881 53,783,175,744 392,594,316,408
34,423 434 1,184,942,929 188,356 14,939,582
2,208 560 4,875,264 313,600 1,236,480
3,238 66 10,484,644 4,356 213,708
1,543 235 2,380,849 55,225 362,605
119291 15,204 14,230,342,681 231,161,616 1,813,700,364
 10,539 1,282 111,070,521 1,643,524 13,510,998
203394 16,909 41,369,119,236 285,914,281 3,439,189,146
572546 37,022 327,808,922,116 1,370,628,484 21,196,798,012
875 2 765,625 4 1,750
1032490 76,675 1,066,035,600,100 5,879,055,625 79,166,170,750
5,936 317 35,236,096 100,489 1,881,712
887413 70,863 787,501,832,569 5,021,564,769 62,884,747,419
40,443 4,792 1,635,636,249 22,963,264 193,802,856
231190.00 135844 53,448,816,100 18,453,592,336 31,405,774,360
Totals
∑x ∑y ∑x2 ∑y2 ∑xy
9,291,276 1,202,839 8,132,866,747,168 157,175,027,023 827,790,537,604

r= ∑xy –(∑x∑y)
n

∑x2 – (∑x)2 ∑y2 – (∑y)2

N n

As per formula
r = 827,790,537,604- (9,291,276* 1,202,839)
32

8,132,866,747,168- (9,291,276)2 157,175,027,023– (1,202,839)2

32 32

= 0.6135

It shows a moderate positive correlation.

Q3 a. Summarized the following data by calculating the mean and standard deviation for Number of
Indigenous (Desi) Total Cattle and Total Buffalo.

Mean and standard deviation for number of Indigenous Desi Total cattle.

District Indigenous (Desi) Total Cattle Xi - µ (Xi - µ)2

Xi

Uttarkashi 82991 -15109.2 228288854.44

Chamoli 132165 34064.77 1160408502.75

Rudraprayag 71277 -26823.2 719485708.90

Tehri Garhwal 80833 -17267.2 298157258.44

Dehradun 87753 -10347.2 107065184.59

 Garhwal 235412 137311.8 18854521969.28

Pithoragarh 108417 10316.77 106435727.36

Bageshwar 70863 -27237.2 741866739.98

Almora 132038 33937.77 1151772180.36

Champawat 45506 -52594.2 2766153110.21

Nainital 101009 2908.769 8460938.44

Udham Singh Nagar 63311 -34789.2 1210290577.51

Hardwar 63728 -34372.2 1181450248.05

Totals 1275303 28534357000.31

Mean formula is as follows

µ = ∑ Xi
N
= 1275303
13
= 98100.23

Standard Deviation formula is as follows:

σ= ∑(Xi - µ)2
N
= 28534357000.31
13

= 46850.29924

Mean and standard deviation for number of Total Buffalo.

Total Buffalo
District Xi Xi - µ (Xi - µ)2
Uttarkashi 25945 -40694.8 1656070503.49
Chamoli 37922 -28717.8 824714687.72
Rudraprayag 31115 -35524.8 1262014694.25
Tehri Garhwal 79394 12754.15 162668440.33
Dehradun 52185 -14454.8 208942577.33
Garhwal 30076 -36563.8 1336914845.56
Pithoragarh 37056 -29583.8 875203953.25
Bageshwar 31432 -35207.8 1239592430.79
Almora 77444 10804.15 116729740.33
Champawat 18599 -48040.8 2307922899.18
Nainital 77759 11119.15 123635582.25
 Udham Singh Nagar 152911 86271.15 7442711985.95
Hardwar 214480 147840.2 21856711089.25
Totals 866318 39413833429.69

Mean formula is as follows

µ = ∑ Xi
N
= 866318
13
= 66639.85

Standard Deviation formula is as follows:

σ= ∑(Xi - µ)2
N
= 39413833429.69
13

= 55062.08624

Q3.b - The general pattern (here, time series component) across the given years using

an appropriate graph.

Chart Title
4000
3500
3000
2500
2000
1500
1000
500
0
1956-57

1978-79

1988-89

2000-01

2010-11
1950-51
1952-53
1954-55

1958-59
1960-61
1962-63
1964-65
1966-67
1968-69
1970-71
1972-73
1974-75
1976-77

1980-81
1982-83
1984-85
1986-87

1990-91
1992-93
1994-95
1996-97
1998-99

2002-03
2004-05
2006-07
2008-09

2012-13
2014-15
2016-17
2018-19
2020-21

Productivity Groundnut(Kg./hectare) Productivity Rape Seed and mustard (Kg./hectare)

Explanation of chart: The chart shows details for Productivity of groundnut in blue line and
Productivity if Rape seed and mustard in orange, both the lines are showing slow increase or
decrease in productivity over the period of time.
Time series analysis is a statistical technique that deals with trend analysis and time series data.
Data from time series are periodic time periods that have been measured at regular intervals or
gathered at certain times. To put it another way, a time series is just a collection of data points
arranged chronologically, and time series analysis is the act of interpreting this data.

Time series analysis can be a challenging objective for organisations, as we have shown above. One
of many mathematical models may be employed in time series analysis to provide correct findings
from model-fitting, such as autoregressive integrated moving average (ARIMA) models, multivariate
models and Holt-Winters exponential smoothing

Time-series data are generally composed of four elements.

• Trend – A trend exists when there is a long-term increase or decrease in the data.
• Cycles - The term "cycle" describes periodic changes in time series that often last more than
a year and sometimes even many years.
• Seasonal effect - Seasonal variation is a change in a time series that occurs more frequently
or less frequently over the course of a single year.
• Irregular fluctuations - Irregular or random changes, these are movements that appear
erratically and often for brief periods of time.
As per the data provided in the question it follows long term variation in trend which can be Trend
or Cyclical variations. The data is provided for bracket of 71 years, these movements are broad,
steady, and regular in nature, rising or falling slowly in the same direction as shown in productivity
chart above. Reason for these changes could be due to seasons, changes in prices, natural calamities
like epidemic, earthquake, etc, political changes or increase in particular commodity like Groundnut
or Rape seeds and mustards.