Essentials of Business Analytics 2nd

Edition Camm Solutions Manual

Go to download the full and correct content document:
https://testbankfan.com/product/essentials-of-business-analytics-2nd-edition-camm-s
olutions-manual/
More products digital (pdf, epub, mobi) instant
download maybe you interests ...

Essentials of Business Analytics 2nd Edition Camm Test

Bank

https://testbankfan.com/product/essentials-of-business-
analytics-2nd-edition-camm-test-bank/

Essentials of Business Analytics 1st Edition Camm

Solutions Manual

https://testbankfan.com/product/essentials-of-business-
analytics-1st-edition-camm-solutions-manual/

Essentials of Business Analytics 1st Edition Camm Test

Bank

https://testbankfan.com/product/essentials-of-business-
analytics-1st-edition-camm-test-bank/

Business Analytics 3rd Edition Camm Test Bank

https://testbankfan.com/product/business-analytics-3rd-edition-
camm-test-bank/
Business Analytics 2nd Edition Evans Solutions Manual

https://testbankfan.com/product/business-analytics-2nd-edition-
evans-solutions-manual/

Business Analytics 2nd Edition Evans Test Bank

https://testbankfan.com/product/business-analytics-2nd-edition-
evans-test-bank/

Business Analytics 3rd Edition Cam Solutions Manual

https://testbankfan.com/product/business-analytics-3rd-edition-
cam-solutions-manual/

Business Analytics 3rd Edition Evans Solutions Manual

https://testbankfan.com/product/business-analytics-3rd-edition-
evans-solutions-manual/

Business Analytics 1st Edition Evans Solutions Manual

https://testbankfan.com/product/business-analytics-1st-edition-
evans-solutions-manual/
 Time Series Analysis and Forecasting

Chapter 8
Time Series Analysis and Forecasting

Solutions:

1. The following table shows the calculations for parts (a), (b), and (c).

Absolute Absolute
Value of Squared Value of
Time Series Forecast Forecast Forecast Percentage Percentage
Week Value Forecast Error Error Error Error Error
1 18
2 13 18 -5 5 25 -38.46 38.46
3 16 13 3 3 9 18.75 18.75
4 11 16 -5 5 25 -45.45 45.45
5 17 11 6 6 36 35.29 35.29
6 14 17 -3 3 9 -21.43 21.43
Totals 22 104 -51.30 159.38

a. MAE = 22/5 = 4.4

b. MSE = 104/5 = 20.8

c. MAPE = 159.38/5 = 31.88

d. The forecast for week 7 is ŷ7 = y6 = 14.

2. The following table shows the calculations for parts (a), (b), and (c).

Absolute Absolute
Value of Squared Value of
Time Series Forecast Forecast Forecast Percentage Percentage
Week Value Forecast Error Error Error Error Error
1 18
2 13 18.00 -5.00 5.00 25.00 -38.46 38.46
3 16 15.50 0.50 0.50 0.25 3.13 3.13
4 11 15.67 -4.67 4.67 21.81 -42.45 42.45
5 17 14.50 2.50 2.50 6.25 14.71 14.71
6 14 15.00 -1.00 1.00 1.00 -7.14 7.14
Totals 13.67 54.31 -70.21 105.86

a. MAE = 13.67/5 = 2.73

b. MSE = 54.31/5 = 10.86

c. MAPE = 105.89/5 = 21.18

8-1
 Time Series Analysis and Forecasting

d. The forecast for week 7 is ŷ7 = (y1 + y2 + y3 + y4 + y5 + y6) / 6 = (18 + 13 + 16 + 11 + 17 + 14) / 6 =

14.83.

3. The following table shows the measures of forecast error for both methods.

Exercise 1 Exercise 2
MAE 4.40 2.73
MSE 20.80 10.86
MAPE 31.88 21.18

For each measure of forecast accuracy the average of all the historical data provided more accurate
forecasts than simply using the most recent value.

4. a.

Squared
Time Series Forecast Forecast
Month Value Forecast Error Error
1 24
2 13 24 -11 121
3 20 13 7 49
4 12 20 -8 64
5 19 12 7 49
6 23 19 4 16
7 15 23 -8 64
Total 363

MSE = 363/6 = 60.5

The forecast for month 8 is ŷ8 = y7 = 15.

b.

Squared
Time Series Forecast Forecast
Week Value Forecast Error Error
1 24
2 13 24.00 -11.00 121.00
3 20 18.50 1.50 2.25
4 12 19.00 -7.00 49.00
5 19 17.25 1.75 3.06
6 23 17.60 5.40 29.16
7 15 18.50 -3.50 12.25
Total 216.72

8-2
 Time Series Analysis and Forecasting

MSE = 216.72/6 = 36.12

Forecast for month 8 is ŷ8 = (y1 + y2 + y3 + y4 + y5 + y6 + y7) / 7 = (24 + 13 + 20 + 12 + 19 + 23 +
15) / 7 = 18.

c. The average of all the previous values is better because MSE is smaller.

5. a.

20

18

16

14
Time Series Value

12

10

0
1 2 3 4 5 6
Week (t)
The data appear to follow a horizontal pattern.

b. Three-week moving average.

Squared
Time Series Forecast Forecast
Week Value Forecast Error Error
1 18
2 13
3 16
4 11 15.67 -4.67 21.78
5 17 13.33 3.67 13.44
6 14 14.67 -0.67 0.44
Total 35.67

MSE = 35.67/3 = 11.89

The forecast for week 7 is ŷ7 = (y4 + y5 + y6) / 3 = (11 + 17 + 14) / 3 = 14.

c. Smoothing constant  = 0.2

8-3
 Time Series Analysis and Forecasting

Squared
Time Series Forecast Forecast
Week Value Forecast Error Error
1 18
2 13 18.00 -5.00 25.00
3 16 17.00 -1.00 1.00
4 11 16.80 -5.80 33.64
5 17 15.64 1.36 1.85
6 14 15.91 -1.91 3.66
Total 65.15

MSE = 65.15/5 = 13.03

The forecast for week 7 is ŷ7 = y6 + (1-) ŷ6 = 0.2(14) + (1 - 0.2)15.91 = 15.53.

d. The three-week moving average provides a better forecast since it has a smaller MSE.

e. Several values of  will yield an MSE smaller than the MSE associated with  = 0.2. The table below
shows the resulting MSE from several different  .that you select.

 MSE
0.1 15.04
0.2 13.03
0.3 12.20
0.4 12.09
0.5 12.47
0.6 13.25
0.7 14.41

The value of  that yields the minimum MSE is  = 0.368, which yields an MSE of 12.06.

= 0.368
Squared
Time Series Forecast Forecast
Week Value Forecast Error Error
1 18
2 13 18 -5.00 25.00
3 16 16.16 -0.16 0.03
4 11 16.10 -5.10 26.03
5 17 14.23 2.77 7.69
6 14 15.25 -1.25 1.55
Total 60.30
MSE =
60.30/5= 12.06

8-4
 Time Series Analysis and Forecasting

6. a.

30

25
Time Series Value

20

15

10

0
1 2 3 4 5 6 7
Week (t)

The data appear to follow a horizontal pattern.

b. Three-week moving average.

Squared
Time Series Forecast Forecast
Week Value Forecast Error Error
1 24
2 13
3 20
4 12 19.00 -7.00 49.00
5 19 15.00 4.00 16.00
6 23 17.00 6.00 36.00
7 15 18.00 -3.00 9.00
Total 110.00

MSE = 110/4 = 27.5.

The forecast for week 8 is ŷ8 = (y5 + y6 + y7) / 3 = (19 + 23 + 15) / 3 = 19.

c. Smoothing constant  = 0.2

Squared
Time Series Forecast Forecast
Week Value Forecast Error Error
1 24

8-5
 Time Series Analysis and Forecasting

2 13 24.00 -11.00 121.00

3 20 21.80 -1.80 3.24
4 12 21.44 -9.44 89.11
5 19 19.55 -0.55 0.30
6 23 19.44 3.56 12.66
7 15 20.15 -5.15 26.56
Total 252.87

MSE = 252.87/6 = 42.15

The forecast for week 8 is ŷ8 = y7 + (1-) ŷ7 =0.2(15) + (1 - 0.2)20.15 = 19.12.

d. The three-week moving average provides a better forecast since it has a smaller MSE.

e. Several values of  will yield an MSE smaller than the MSE associated with  = 0.2. The table below
shows the resulting MSE for several different values.

 MSE
0.1 48.86
0.2 42.15
0.3 39.85
0.4 39.79
0.5 41.02
0.6 43.18
0.7 46.15

The value of  that yields the minimum MSE is  = 0.351, which yields an MSE of 39.61.

= 0.351

Squared
Time Series Forecast Forecast
Month Value Forecast Error Error
1 24
2 13 24 -11.00 121.00
3 20 20.13 -0.13 0.02
4 12 20.09 -8.09 65.40
5 19 17.25 1.75 3.08
6 23 17.86 5.14 26.40
7 15 19.67 -4.67 21.79
Total 237.69

MSE = 237.69/6 = 39.61428577

7. a. Four and Five -week moving averages.

8-6
 Time Series Analysis and Forecasting

4 Period 5 period
Moving Moving
Week Sales Average Average
1 17
2 21
3 19
4 23
5 18 20.00
6 16 20.25 19.60
7 20 19.00 19.40
8 18 19.25 19.20
9 22 18.00 19.00
10 20 19.00 18.80
11 15 20.00 19.20
12 22 18.75 19.00

b. The MSE for the four-week and five-week moving averages.

For the four-week moving average:

Time Squared
Series Forecast Forecast
Week Value Forecast Error Error
1 17
2 21
3 19
4 23
5 18 20.00 -2.00 4.0000
6 16 20.25 -4.25 18.0625
7 20 19.00 1.00 1.0000
8 18 19.25 -1.25 1.5625
9 22 18.00 4.00 16.0000
10 20 19.00 1.00 1.0000
11 15 20.00 -5.00 25.0000
12 22 18.75 3.25 10.5625
Total 77.1875

MSE = 77.1875/8 = 9.648

For the five-week moving average:

Time Squared
Series Forecast Forecast
Week Value Forecast Error Error
1 17
2 21

8-7
 Time Series Analysis and Forecasting

3 19
4 23
5 18
6 16 19.60 -3.60 12.96
7 20 19.40 0.60 0.36
8 18 19.20 -1.20 1.44
9 22 19.00 3.00 9.00
10 20 18.80 1.20 1.44
11 15 19.20 -4.20 17.64
12 22 19.00 3.00 9.00
Total 51.84

MSE = 51.84/7 = 7.406

c. The MSE for the moving average forecasts are:

three week 27.500

four week 9.648
five week 7.406

Using the MSE as our standard, the best number of weeks of past data to use in the moving average
computation is five.

8. a. Exponential smoothing forecasts using α = 0.1:

Time Squared
Series Forecast Forecast
Week Value Forecast Error Error
1 17 17.00
2 21 17.00 4.00 16.00
3 19 17.40 1.60 2.56
4 23 17.56 5.44 29.59
5 18 18.10 -0.10 0.01
6 16 18.09 -2.09 4.38
7 20 17.88 2.12 4.48
8 18 18.10 -0.10 0.01
9 22 18.09 3.91 15.32
10 20 18.48 1.52 2.32
11 15 18.63 -3.63 13.18
12 22 18.27 3.73 13.94
Total 101.78

MSE = 101.78/11 = 9.253

For a smoothing constant of α = 0.2:

8-8
 Time Series Analysis and Forecasting

Time Squared
Series Forecast Forecast
Week Value Forecast Error Error
1 17 17.00
2 21 17.00 4.00 16.00
3 19 17.80 1.20 1.44
4 23 18.04 4.96 24.60
5 18 19.03 -1.03 1.07
6 16 18.83 -2.83 7.98
7 20 18.26 1.74 3.03
8 18 18.61 -0.61 0.37
9 22 18.49 3.51 12.34
10 20 19.19 0.81 0.66
11 15 19.35 -4.35 18.94
12 22 18.48 3.52 12.38
Total 98.80

MSE = 98.80 / 11 = 8.982

Applying the MSE measure of forecast accuracy, a smoothing constant of α = 0.2 produces a smaller
MSE and so is preferred.

b. For a smoothing constant of α = 0.1:

Time Absolute
Series Forecast Forecast
Week Value Forecast Error Error
1 17 17.00
2 21 17.00 4.00 4.00
3 19 17.40 1.60 1.60
4 23 17.56 5.44 5.44
5 18 18.10 -0.10 0.10
6 16 18.09 -2.09 2.09
7 20 17.88 2.12 2.12
8 18 18.10 -0.10 0.10
9 22 18.09 3.91 3.91
10 20 18.48 1.52 1.52
11 15 18.63 -3.63 3.63
12 22 18.27 3.73 3.73
Total 28.25

MAE = 28.25 / 11 = 2.568

For a smoothing constant of α = 0.2:

8-9
 Time Series Analysis and Forecasting

Time Absolute
Series Forecast Forecast
Week Value Forecast Error Error
1 17 17.00
2 21 17.00 4.00 4.00
3 19 17.80 1.20 1.20
4 23 18.04 4.96 4.96
5 18 19.03 -1.03 1.03
6 16 18.83 -2.83 2.83
7 20 18.26 1.74 1.74
8 18 18.61 -0.61 0.61
9 22 18.49 3.51 3.51
10 20 19.19 0.81 0.81
11 15 19.35 -4.35 4.35
12 22 18.48 3.52 3.52
Total 28.56

MAE = 28.56 / 11 = 2.596

Applying the MAE measure of forecast accuracy, a smoothing constant of α = 0.1 produces a slightly
smaller MAE and so is preferred.

c. For a smoothing constant of α = 0.1:

Time Absolute Value of

Series Forecast 100*(Forecast Error/ 100*(Forecast Error/
Week Value Forecast Error Time Series Value) Time Series Value)
1 17 17.00
2 21 17.00 4.00 19.05 19.05
3 19 17.40 1.60 8.42 8.42
4 23 17.56 5.44 23.65 23.65
5 18 18.10 -0.10 -0.58 0.58
6 16 18.09 -2.09 -13.09 13.09
7 20 17.88 2.12 10.58 10.58
8 18 18.10 -0.10 -0.53 0.53
9 22 18.09 3.91 17.79 17.79
10 20 18.48 1.52 7.61 7.61
11 15 18.63 -3.63 -24.20 24.20
12 22 18.27 3.73 16.97 16.97
Total 142.46

MAPE = 142.46 / 11 = 12.95

For a smoothing constant of α = 0.2:

8 - 10
 Time Series Analysis and Forecasting

Time Absolute Value of

Series Forecast 100*(Forecast Error/ 100*(Forecast Error/
Week Value Forecast Error Time Series Value) Time Series Value)
1 17 17.00
2 21 17.00 4.00 19.05 19.05
3 19 17.80 1.20 6.32 6.32
4 23 18.04 4.96 21.57 21.57
5 18 19.03 -1.03 -5.73 5.73
6 16 18.83 -2.83 -17.66 17.66
7 20 18.26 1.74 8.70 8.70
8 18 18.61 -0.61 -3.38 3.38
9 22 18.49 3.51 15.97 15.97
10 20 19.19 0.81 4.05 4.05
11 15 19.35 -4.35 -29.01 29.01
12 22 18.48 3.52 15.99 15.99
Total 147.43

MAPE = 147.43 / 11 = 13.40

Applying the MAPE measure of forecast accuracy, a smoothing constant of α = 0.1 produces a smaller
MAPE and so is preferred.

9. a. ŷ13 = 0.2y12 + 0.16y11 + 0.64(0.2y10 + 0.8 ŷ10 )

= 0.2y12 + 0.16y11 + 0.128y10 + 0.512 ŷ10
ŷ13 = 0.2y12 + 0.16y11 + 0.128y10 + 0.512(0.2y9 + 0.8 ŷ9 )
= 0.2y12 + 0.16y11 + 0.128y10 + 0.1024y9 + 0.4096 ŷ9
ŷ13 = 0.2y12 + 0.16y11 + 0.128y10 + 0.1024y9 + 0.4096(0.2y8 + 0.8 ŷ8 )
= 0.2y12 + 0.16y11 + 0.128y10 + 0.1024y9 + 0.08192y8 + 0.32768 ŷ8

b. The more recent data receive the greater weight or importance in determining the forecast. The moving
averages method weights the last n data values equally in determining the forecast.

10. a.

8 - 11
 Time Series Analysis and Forecasting

3400

3200

3000

Sales Volumne 2800

2600

2400

2200

2000
0 2 4 6 8 10 12 14
Week

The time series plot indicates a horizontal pattern.

b.
Squared Value
Sales Forecast of Forecast
Week Volume Forecast Error Error
1 2750
2 3100 2750.00 350.000 122,500.00
3 3250 2890.00 360.000 129,600.00
4 2800 3034.00 -234.000 54,756.00
5 2900 2940.40 -40.400 1,632.16
6 3050 2924.24 125.760 15,815.58
7 3300 2974.54 325.456 105,921.61
8 3100 3104.73 -4.726 22.34
9 2950 3102.84 -152.836 23,358.79
10 3000 3041.70 -41.702 1,739.02
11 3200 3025.02 174.979 30,617.68
12 3150 3095.01 54.987 3,023.62
Total 488,986.80

Note: MSE = 488,986.80/11 = 44,453

Forecast for week 13 is ŷ13 = y12 + (1-) ŷ12 = 0.4(3150) + 0.6(3095.01) = 3117.01 or 3117 half-
gallons of milk.

11. a.

8 - 12
 Time Series Analysis and Forecasting

90

% of Shipments received on time

85

80

75
1 2 3 4 5 6 7 8 9 10 11 12
Month
The data appear to follow a horizontal pattern.

b. For the three month moving average:

Time Square
Series Forecast Forecast
Month Value Forecast Error Error
1 80
2 82
3 84
4 83 82.00 1.00 1.00
5 83 83.00 0.00 0.00
6 84 83.33 0.67 0.44
7 85 83.33 1.67 2.78
8 84 84.00 0.00 0.00
9 82 84.33 -2.33 5.44
10 83 83.67 -0.67 0.44
11 84 83.00 1.00 1.00
12 83 83.00 0.00 0.00
Total 11.11

MSE = 11.11 / 9 = 1.235

8 - 13
 Time Series Analysis and Forecasting

For the exponential smoothing forecast for α = 0.2:

Time Square
Series Forecast Forecast
Month Value Forecast Error Error
1 80 80.00
2 82 80.00 2.00 4.00
3 84 80.40 3.60 12.96
4 83 81.12 1.88 3.53
5 83 81.50 1.50 2.26
6 84 81.80 2.20 4.85
7 85 82.24 2.76 7.63
8 84 82.79 1.21 1.46
9 82 83.03 -1.03 1.06
10 83 82.83 0.17 0.03
11 84 82.86 1.14 1.30
12 83 83.09 -0.09 0.01
15.35 39.11

MSE = 39.80 / 11 = 3.555

Applying the MSE measure of forecast accuracy, a three-month moving average produces a smaller
MSE and so is preferred.

c. Using a three-month moving average, the forecast for next month (t = 13) is
ŷ13 = (y10 + y11 + y12) / 3 = (83 + 84 + 83) / 3 = 83.33.

8 - 14
 Time Series Analysis and Forecasting

12. a.

11.0

10.5

10.0
Interest Rate (%)

9.5

9.0

8.5

8.0

7.5

7.0
1 2 3 4 5 6 7 8 9 10 11 12
Month (t)
The data appear to follow a horizontal pattern.

b.

Time-Series 3-Month Moving 4-Month Moving

Month Value Average Forecast (Error)2 Average Forecast (Error)2
1 9.5
2 9.3
3 9.4
4 9.6 9.40 0.04
5 9.8 9.43 0.14 9.45 0.12
6 9.7 9.60 0.01 9.53 0.03
7 9.8 9.70 0.01 9.63 0.03
8 10.5 9.77 0.53 9.73 0.59
9 9.9 10.00 0.01 9.95 0.00
10 9.7 10.07 0.14 9.98 0.08
11 9.6 10.03 0.18 9.97 0.14
12 9.6 9.73 0.02 9.92 0.10
1.08 1.09

MSE(3-Month) = 1.08 / 9 = 0.12

MSE(4-Month) = 1.09 / 8 = 0.14

The MSE for the 3-Month moving average is smaller, so use the 3-Month moving average.

c. The forecast for month 13 is ŷ13 = (y10 + y11 + y12) / 3 = (9.7 + 9.6 + 9.6) / 3 = 9.63.

8 - 15
 Time Series Analysis and Forecasting

13. a.

400

350
Value (millions of dollars)
300

250

200

150

100

50

0
1 2 3 4 5 6 7 8 9 10 11 12
Month (t)

The data appear to follow a horizontal pattern.

b.
Time-Series 3-Month Moving  = 0.2
Month Value Average Forecast (Error)2 Forecast (Error)2
1 240
2 350 240.00 12100.00
3 230 262.00 1024.00
4 260 273.33 177.69 255.60 19.36
5 280 280.00 0.00 256.48 553.19
6 320 256.67 4010.69 261.18 3459.79
7 220 286.67 4444.89 272.95 2803.70
8 310 273.33 1344.69 262.36 2269.57
9 240 283.33 1877.49 271.89 1016.97
10 310 256.67 2844.09 265.51 1979.36
11 240 286.67 2178.09 274.41 1184.05
12 230 263.33 1110.89 267.53 1408.50
17,988.52 27,818.49
MSE(3-Month) = 17,988.52 / 9 = 1998.72

MSE(α = 0.2) = 27,818.49 / 11 = 2528.95

Based on the above MSE values, the 3-month moving average appears better. However, exponential
smoothing was penalized by including month 2 which was difficult for any method to forecast. Using
only the errors for months 4 to 12, the MSE for exponential smoothing is:

MSE( = 0.2) = 14,694.49 / 9 = 1632.72

Thus, exponential smoothing was better considering months 4 to 12.

c. Using exponential smoothing with  = 0.2,

ŷ13 = y12 + (1 - ) ŷ12 = 0.2(230) + 0.8(267.53) = 256.66

8 - 16
 Time Series Analysis and Forecasting

14. a.

160

140

120

100
Sales

80

60

40

20

0
1 2 3 4 5 6 7 8 9 10 11 12
Month (t)

The data appear to follow a horizontal pattern.

b. Smoothing constant  = 0.3.

Forecast Error Squared Error

Month t Time-Series Value yt Forecast yˆ t yt - yˆ t  yt - yˆ t 
2

1 105
2 135 105.00 30.00 900.00
3 120 114.00 6.00 36.00
4 105 115.80 -10.80 116.64
5 90 112.56 -22.56 508.95
6 120 105.79 14.21 201.92
7 145 110.05 34.95 1221.50
8 140 120.54 19.46 378.69
9 100 126.38 -26.38 695.90
10 80 118.46 -38.46 1479.17
11 100 106.92 -6.92 47.89
12 110 104.85 5.15 26.52
Total 5613.18

MSE = 5613.18 / 11 = 510.29

The forecast for month 13 is ŷ13 = y12 + (1-) ŷ12 = 0.3(110) + 0.7(104.85) = 106.4

c. The MSE values for exponential smoothing forecasts with several different values of  appear below.

8 - 17
 Time Series Analysis and Forecasting

 MSE
0.01 461.45
0.05 460.48
0.1 468.11
0.2 489.82
0.3 510.28
0.4 527.61
0.5 540.57
0.6 547.63
0.7 547.73

The values of  that yields the smallest possible MSE is  = 0.033, which yields an MSE of 459.693

 0.033
Squared
Time Series Forecast Forecast
Month Value Forecast Error Error
1 105
2 135 105.00 30.00 900.00
3 120 105.98 14.02 196.65
4 105 106.43 -1.43 2.06
5 90 106.39 -16.39 268.53
6 120 105.85 14.15 200.13
7 145 106.31 38.69 1496.61
8 140 107.57 32.43 1051.46
9 100 108.63 -8.63 74.47
10 80 108.35 -28.35 803.65
11 100 107.43 -7.43 55.14
12 110 107.18 2.82 7.93
Total 5056.62

MSE = 5056.62 / 11 = 459.693

8 - 18
 Time Series Analysis and Forecasting

15. a.

8.00

7.90

7.80
Commodity Futures Index

7.70

7.60

7.50

7.40

7.30

7.20

7.10

7.00
1 2 3 4 5 6 7 8 9 10
Week

The data appear to follow a horizontal pattern.

b. The MSE values for exponential smoothing forecasts with several different values of  appear below.

 MSE
0.1 0.0266
0.2 0.0171
0.3 0.0127
0.4 0.0106
0.5 0.0095
0.6 0.0090
0.7 0.0087
0.8 0.0086
0.9 0.0085
0.95 0.0085
0.99 0.0085

The value of  that yields the minimum MSE is  = 0.9102, which yields an MSE of 0.0085. Values of 
near 0.9102 will yield similar values for the MSE.

16. a.

8 - 19
 Time Series Analysis and Forecasting

33

Percentage of Stocks iin Portfolio

32

31

30

29

28

27

26

25
0 1 2 3 4 5 6 7 8 9
Period (t)

b. The value of the MSE will vary depending on the ultimate value of  that you select. The resulting MSE
values for several different values appear below.
 MSE
0.1 1.71
0.2 1.40
0.3 1.27
0.4 1.23
0.5 1.22
0.6 1.24
0.7 1.27

The value of  that yields the smallest possible MSE is  = 0.467, which yields an MSE of 1.22.

= 0.467
Forecast Squared
Period Stock % Forecast Error Forecast Error
1st-2011 29.8
2nd-2011 31.0 29.8.0 1.20 1.44
3rd-2011 29.9 30.36 -0.46 0.21
4th-2011 30.1 30.15 -0.05 0.00
1st-2012 32.2 30.12 2.08 4.31
2nd-2012 31.5 31.09 0.41 0.16
3rd-2012 32.0 31.28 0.72 0.51
4th-2012 31.9 31.62 0.28 0.08
1st-2013 30.0 31.75 -1.75 3.06
2nd-2013 30.93 Total 9.78

8 - 20
Another random document with
no related content on Scribd:
whenever we stopped Mansing pathetically conversed with the dog, who
seemed almost to understand all the coolie was telling him.

A Tibetan Camp of Black Tents

It was rather a puzzle to me why this dog followed us so long, for we had so little
food that we could but seldom spare him any. He slept near us at night with his
head on the lap of one of us, and during the march he showed quite sporting
instincts by chasing antelopes and kiang (wild horse) when we encountered
herds of hundreds of them. Curiously enough, when we entered a Tibetan
encampment he always avoided being seen in our company. It seemed almost
as if he realised that we were not welcome guests in the country, and feared the
consequences. Possibly [139]he only temporarily left us to see what he could pick
up in the way of food, but whenever we came across him in the encampment, he
never would show signs of recognition, much less of affection, as was the case
when he would rejoin us some miles beyond on the march, when he made
ample efforts to reingratiate himself. He seemed almost to want to express:
“Sorry I had to cut you in the encampment, but I really had to!”
At last the day came when we were captured, and underwent several kinds of
tortures, as I have already described in In the Forbidden Land. The dog had
vanished, and, to tell the truth, we did not give him much of a thought, as we
were somewhat concerned about ourselves.

One day, when Mansing and I were stretched, or rather suspended, on a

primitive kind of rack, and we were for some time left to ourselves—the soldiers
and Lamas having retired some distance off into the huge tent of the Pombo, a
high official—the dog sadly walked towards us, sniffing us, and rubbing himself
against Mansing and me. He was particularly affectionate to Mansing, whose
face he licked several times; then with a pathetic movement of his head as if to
express his sorrow, he gave us a parting sad look, turned his back, [140]and
walked slowly and sorrowfully away. That was his last mark of friendship and the
last we saw of him.

Tibetan encampments have no great interest except for the peculiar shape of
the black tents—a pattern of shelter most suitable for the climate of their country.
The two sides of the tent are separate, and when the tent is put up it leaves an
aperture all along its highest ridge. This is for various reasons. First, because
the Tibetans light fires inside their tents, and an opening is necessary to let the
smoke out; also as a means of ventilation, the cold air not penetrating so quickly
as when it comes in at the sides, owing to the warmed atmosphere inside. The
black tents are woven of a coarse and waterproof fabric of yak hair. Through the
slit at the top generally protrude the props of the matchlocks bundled against
one of the tent poles.

Every man in Tibet owns one of these weapons, and is considered a soldier in
time of war.
 Interior of a Tibetan Tent, showing Churn for mixing Tea with Butter

The inside of a large Tibetan tent is quaint enough when you have reached it by
skipping over masses of dirt and refuse which surround its outside. Only, when
you peep in, the odour is rather strong of the people, old and young, all since
[141]birth innocent of washing, and the smell of badly-prepared skins, and stores
of chura (cheese). Nor must I forget to mention the wall of yak-dung erected
right round the tent inside to serve the double purpose of protection against the
wind where the tent meets the ground, and of fuel, being gradually demolished
to feed the double mud-stove erected in the centre of the tent. Mud alone is also
occasionally used for the inside wall.

As you know, dung is practically the only fuel obtainable in the highest parts of
Tibet, although occasionally a few low shrubs are to be found. The fuel is
constantly collected and conveyed from one camp to the next, when changing in
order to find more suitable grazing for the sheep and yaks.

The centre mud-stove is built according to the most practical notions to make it
draw properly, and upon it can nearly always be seen one or two large raksangs,
brass vessels in which brick-tea is being stewed and stirred with a long brass
spoon. But the operation of tea-making is rather complicated in Tibet. After the
leaves have been stewed long enough the liquid is poured into a dongbo, or
cylindrical wooden churn, in which have been deposited several balls of butter
with copious [142]sprinkling of salt. A piston which passes through the movable
lid is then vigorously set in action, and when well stirred and steaming the
mixture is served all round and avidly drunk in wooden bowls, one of which
every one carries about the person. Tsamba, a kind of oatmeal, is frequently
mixed with the tea in the bowls, where it is made into a paste with the fingers.
 A Little Boy learning to Pray

No matter how much non-Tibetan folks may find merriment in the idea of tea
being brewed with butter and salt, there is no doubt that for a climate like Tibet it
is “the drink” par excellence. It warms, nourishes, and is easily digested. I very
often indulged in the luxury myself, when I could obtain butter, only, my digestion
working rather rapidly owing to the amount of roughing we daily endured, I left
out the salt so that I should not digest the mixture too quickly.

The richer owners of tents generally have a sort of folding shrine, with one or
more images of Buddha, which occupies the place of honour in the tent.
Numerous brass bowls and ornaments are displayed in front of these images
and also offerings of tsamba and butter. Wicks, burning in butter, are
occasionally lighted around and upon the shrine. Decrepit old women seem to
[143]spend most of their time revolving their prayer-wheels and muttering prayers
in front of these altars, and when occasion arises thus teaching little children to
do the same. The younger folk, too, are very religious, but not to the fanatical
extent of the older ones.

It is quite amusing to see little mites—children are always quaint in every country
—try to master the art of revolving the prayer-wheel. It must be revolved from left
to right, to pray in the proper fashion,—not that if you revolved it the other way
you would necessarily be swearing, only, according to the laws of Tibetan
Buddhism, prayers spun in the wrong direction would have no effect and bring
no benefit. In a similar way circumambulations, either round hills for pilgrimages,
or round a tent, or round a sacred lake, must always follow a similar direction to
the revolving of the prayer-wheel.

In Lhassa and many other sacred places fanatical pilgrims make these
circumambulations, sometimes for miles and miles, and for days together,
covering the entire distance lying flat upon their bodies, then placing the feet
where the head was and stretching themselves full length. Inside temples a
central enclosure is provided, round [144]which these circumambulations are
performed, special devotions being offered before Buddha and many of the
other gilt or high-coloured images which adorn the walls of the temple.

As can be seen by the coloured plate illustrating one of these scenes, from the
ceiling of the temple hang hundreds of long strips, Katas, offered by pilgrims to
the temple and becoming so many flying prayers when hung up—for mechanical
praying in every way is prominent in Tibet. There is, after all, no reason why
praying should not be made easy like everything else. Thus, instead of having to
learn by heart long and varied prayers, all you have to do is to stuff the entire
prayer-book (written on a roll in Tibet) into the prayer-wheel, and revolve it while
repeating as fast as you can go these four words: “Om mani padme hum,”—
words of Sanscrit origin and referring to the reincarnation of Buddha from a lotus
flower, literally “O God, the gem emerging from the lotus flower.”
 Interior of Tibetan Temple

Worshippers circumambulating the inner enclosure lying flat full length.

The temples of Tibet, except in Lhassa itself, are not beautiful in any way—in
fact, they are generally very tawdry and dirty. The attention of the pilgrims is
directed to a large box, or often a big bowl, where they may deposit whatever
[145]offerings they can spare, and it must be said that their religious ideas are so
strongly developed that they will dispose of a considerable portion of their
money in this fashion.

Large monasteries, of red or yellow Lamas, are attached to these temples,

where proselytes are also educated. These Lamas, whatever their colour, are
very clever in many ways, and have a great hold over the entire country. They
are, ninety per cent of them, unscrupulous scamps, depraved in every way, and
given to every sort of vice. So are the women Lamas. They live and sponge on
the credulity and ignorance of the crowds; and it is to maintain this ignorance,
upon which their luxurious life depends, that foreign influence of every kind is
strictly kept out of the country. Their abnormal powers have been grossly
exaggerated. They practise, it is true, hypnotism, but that is all. They can
perform no more marvellous feats than any one can do in England who is able
to mesmerize. As for the Mahatmas, who, our spiritualistic friends tell us, live in
Tibet, they are purely imaginary, and do not exist. The Tibetans have never
heard of them nor about their doings.

Personally—and I am glad that the few men [146]who know Tibet from personal
knowledge and not from political rivalry agree with me—I believe that the
intrigues of the Lamas with Russia are absolute nonsense. Tibet, it must be
remembered, was not forbidden to Englishmen only, but to everybody from
every side, whether native or white, certain Nepalese and Chinamen, only,
having the privilege of entering the country. It was a fight against Western ways
in general which the Lamas were carrying on, quite successfully owing to the
geographical position of their country, and the natural difficulties of reaching it,
and not a fight against one race more than another. The accounts of the Lhassa
Mission to the Czar were possibly the best diplomatic practical jokes which have
been played upon this credulous country; and the mythical and much-feared
Dorjeff is possibly—at least as far as power is concerned—nothing more than
the creation of hysterical Anglo-Indian officials who, everybody knows, seem to
see the treacherous hand of Russia in everything.
 Tibetan Women weaving

Perhaps no other country but England would be so rash as to go and sink

millions of pounds sterling good money on a country that is, for all practical
purposes, absolutely useless and worthless. [147]This does not detract from its
pictorial, nor from its geographical or ethnological interest; from these points it is
most interesting indeed.

Agriculturally, as I have stated, nothing grows there; no very wealthy mines have
so far been discovered, the only mines that are plentiful being of borax, which
has not sufficient market value to pay for the expensive carriage from Tibet to
the coast. Regarded as a climate for a sanatorium for our sick soldiers in India—
for which Tibet is frequently recommended by Anglo-Indian papers—I believe
that such an establishment would be a very quick way of disposing altogether of
all the sick men sent there. And as for such gigantic schemes as the
construction of railways, say from India to the upper waters of the Yangtze-
Kiang, or to Pekin, the expense of taking a railway over the Himahlya range and
keeping it in working order during the wintry months—nine out of twelve—would,
I think, never be remunerative. In Tibet itself the construction of a railway would
be comparatively easy, as great stretches of the country are almost flat. Stations
of imported fuel would have to be provided for the entire distance across Tibet,
and the engines would have to be constructed specially to suit the great altitude.
[148]

For trade and commerce with the natives themselves, the population of the
country is so small, so deplorably poor and so lacking in wants, and the country
is so large that, personally, I do not see how any large commercial venture in
such a country can turn out successful. It is very difficult to get money where
there is none. Small native traders, of course, can make small profits and be
satisfied. Besides, the intercourse between Tibet and the neighbouring
countries, particularly those to the south, can only take place with comfort during
three months of the summer when the high snow-passes are open.

So that, much as I would like to see Tibet open in a proper way to travellers, I
cannot quite understand the necessity of the Government spending millions of
money and butchering thousands of helpless and defenceless natives in a
manner most repulsive to any man who is a man, and of which we can but be
ashamed—and all this to obtain a valueless commercial treaty. It is true, the
Tibetans had been very impudent in every way on our frontier, but for this we
only have to blame ourselves and our incompetent officials. If, instead of giving
way to their bluff, we had kept a firm hand, matters would have been different.
 Tibetan Women cleaning Wool

[149]

Even in the case of my capture and torture on my first expedition into Tibet I
never had a feeling of resentment towards the Tibetans for what they did to me.
It was very exciting and interesting for me to endeavour to reach their sacred
city, but I did so at my own risk and against their repeated warnings and threats,
and I got nothing more for it in the end than I expected, in fact, bad as it was,
considerably less. Highly amusing as it was to me to give them endless trouble,
it was undoubtedly equally enjoyable to them to torture me, when once they
succeeded in effecting my capture. Possibly, if I now have any feelings at all
towards the Tibetans, it is a feeling of gratitude towards them for sparing my life
in the end, which, by the way, they came within an ace of taking as they had
promised to do.

As a punishment for what they did to me—because, after all, my men and I
suffered a great deal more than the average man could stand—the Government
of India practically ceded, as we have said, all the rights to Tibet of an immense
district of British territory at the frontier. Can you blame the Tibetans for doing
worse if they had a chance? [150]
[Contents]
 CHAPTER XIV

In heart and soul the Tibetan is a sportsman; but if you look for grace in his
movements you will be sorely disappointed. Indeed, more fervour and
clumsiness combined are hardly to be paralleled anywhere. Perhaps the Tibetan
is seen to advantage on his pony, and some of his feats on the saddle I will here
describe.
 A Lama Standard-Bearer

Horse races are quite a favourite form of amusement, and are run in a sensible
manner. Only two ponies at a time go round the course, the final race being run
between the winners of the two best heats. Praying is usually combined, in
some form or other, with everything people do in Tibet, and so even races are
run round the foot of an isolated hill or around an encampment of tents; for, as
you know, circumambulation of any kind, if in the right direction, is equivalent to
prayer, and pleases God. Thus, just as with their prayer-wheels, a rotatory
[151]motion is kept up from left to right, so races are run in the same way from the
standpoint of the spectator.

A Tibetan race would astonish an English crowd—the means adopted by the

well-matched couples being very effective, if somewhat primitive. Such simple
devices as seizing one’s opponent’s reins, or lashing him in the face to keep him
back, or pushing or pulling him off his saddle, are considered fair and legal
means in order to win the race. The last heat is usually the most exciting,
especially for the spectators, for blows with the lash are exchanged in
bewildering profusion by both riders taking part in it, their respective ponies
sharing unsparingly in the punishment. Occasionally the race becomes a regular
hippic wrestling match, when both riders, clinging tightly together, tumble over
and roll to the ground. When the ponies are recaptured, the bruised horsemen
remount and continue the race as if nothing had happened.

The heavy sheepskin coats worn by the Tibetans are some protection when the
lash is applied, and the pain inflicted is not always in proportion to the noise
made by the blow; but such is not the case when they catch one another across
the face. [152]

The winner is presented with a kata by the umpire—a high Lama or a military
officer, a most picturesque creature in a brilliant red coat and fluffy hat, who has
a peculiar standard with hundreds of long, vari-coloured strips of cloth, or flying
prayers. Sitting on a handsome pony, with gaudy harness of green leather inlaid
with brass, a valuable Chinese rug upon the saddle, and many tinkling bells
round the pony’s neck, the umpire and his pony certainly produce a gay
ensemble. This gentleman takes himself very seriously, and seldom
condescends to smile.

The kata, or “scarf of love and friendship,” which is given to the winner is a long
piece of silk-like gauze, the ends of which have been trimmed into a fringe. As I
have elsewhere described at greater length, these katas play quite an important
part in the social intercourse of Tibetans. They can be purchased or obtained
from the Lamas of any monastery, or where no monastery exists the natives
manufacture them themselves, for they are constantly needed. No gift can be
sent nor accepted without “a veil of friendship” accompanying it, and no stranger
ever enters a tent without offering, with outstretched hands, a kata, which he
quickly lays at the feet of [153]his host. Diminutive katas are enclosed in letters;
sweethearts exchange katas on every possible occasion—until they are actually
married. Polyandry being prevalent in Tibet, when one of the several husbands
returns to his wife after the customary absence, he never fails to bring a kata
with him. Not to offer a kata to an honoured visitor is as palpable a breach of
manners, and as great a slight as can possibly be offered in the Forbidden Land.

Necessarily, when a kata has been blessed by the Lamas, or is won in a race
before high officials, it has additional value, and these simple folks value it more
than a gift of money or food. It is stored away in the tent among the heirlooms,
and is handed down to posterity.

A slightly more difficult feat, very common in a similar form in most countries, is
the picking up of a kata by horsemen at full gallop. One horseman, a high
official, revolves the kata seven times in the wind, and then darts full gallop in
one direction, followed by twenty, thirty, or more horsemen riding wildly, and
each trying to push his neighbours out of the way. The official, some thirty yards
ahead, flies the kata in the wind, and when fancy takes him lets it drop out of his
hand. The kata eventually settles on the ground, and the horde [154]of riders
gallops away from it, yelling and quarrelling. At a signal from the officer the
horsemen turn round and make a dash for the scarf, towards which all the
ponies are converging. Clinging to the saddle with one hand and hanging over,
each rider attempts to pick up the kata without dismounting. Collisions and nasty
falls are numerous, and this sport generally partakes of the character of an all-
round fight among the ponies’ legs. Somebody, however, always succeeds in
picking up the scarf and getting clear of the others, when he triumphantly rides
round the camp fluttering the prize in the wind.

Some of the younger fellows are clever at this sport, and when one rider at a
time does the feat, he seldom misses picking up the kata at the first swoop.
 A Race for the Kata

An interesting and more difficult feat of horsemanship I witnessed in Tibet was

the loading and firing of a matchlock while at full gallop—a performance which
requires a firmer seat on the saddle than appears. The heavy and cumbersome
weapons had to be unslung from the shoulders, the props let down, the fuse
lighted by flint and steel, some gunpowder placed and kept in the small side
receptacle, and last, but not least, the shot fired off—that [155]is to say, when it
would go off! The full use of both hands was required in this exercise, and
therefore the horsemen held the reins with their teeth. When firing they lay
almost flat on the ponies’ backs in order to prevent being thrown by the sudden
bucking of the frightened ponies.

Another exercise consists in bodily lifting a person on the saddle while the pony
is at full gallop. The pedestrian is seized as low near the waist as possible, and
the impetus of the pony’s flight, not the rider’s actual strength, is utilised in
raising the person on the saddle.

The women seemed particularly interested in this sport, because a practical

application of this exercise is used by enterprising lads of Tibet to overcome the
scruples of reluctant maids who do not reciprocate their love. At a suitable
opportunity the doomed young lady is abducted bodily in that fashion, and
conveyed in all haste to the suitor’s tent, with the honourable intention, of
course, of making her his happy bride.

Women are scarce in Tibet, and actual raiding parties, I was told, occasionally
take place against neighbouring tribes in order to obtain a fresh supply of wives.

Taking things all round, there are few men and [156]women in Tibet who cannot
ride well, yet there are few who can claim exceptional skill in that line. The
Tibetan generally values his bones too much to indulge in fancy tricks upon his
pony. Some young fellow, more ambitious than others, will master the art of
standing erect upon the saddle while going full speed, his feet being inserted
into the stirrups, which have for the purpose been shortened as high as they
could go. By pressing with his ankles against the saddle he manages to
maintain his balance, in the familiar way of the Cossacks and tribes of Central
Asia, who all excel in this game.

Tibetan saddles, as you know, are in appearance not unlike a cross between a
Cossack saddle and a rude Mexican saddle, and as good as neither, but quite
suited to the country where they are used. Men and women ride astride, with
exceptionally short stirrups, so that the leg is bent at the knee at a right or even
an acute angle. In order to maintain one’s equilibrium when riding fast some
additional stability is obtained by stretching out the arms sideways.
 Tibetan Soldier at Target Practice

Taking all things into consideration, there is no doubt that in a rugged,

mountainous country like Tibet, and for a Tibetan, his is the most practical
[157]and useful type of saddle, and his fashion of riding the most sensible—
evidently the outcome of practical experience. When riding in caravans, driving
herds of laden yaks or ponies, the advantages of legs doubled up high upon the
saddle are soon apparent, avoiding the danger of crushing one’s lower limbs or
having them partly torn off. In the English way of riding, when among obstacles,
one’s legs are always in the way; in the Tibetan fashion they are always out of
the way, or, at any rate, can easily and quickly be moved over from one side to
the other of the saddle. Also, when tired of riding in one position, altering one’s
position to side-saddle is quite convenient and easy.

The blocks of the saddles are of wood imported mainly from India, Nepal, or
China, with bindings of hammered iron or brass, often inlaid with silver and gold.
Lizard skin and coloured leather adorn the front and back of the saddles, and a
substantial pad covers the central part and the otherwise very angular seat. For
extra comfort rugs—occasionally valuable and always decorative in blue and red
tints—are spread, while to leather laces behind the saddle are slung double
bags containing tsamba, chura, or cheese, a brick of compressed tea, and
whatever sundry articles may be used on a journey. [158]The last, but not least
attachment on a Tibetan saddle is a long coiled rope of yak hair with a wooden
peg at the end for tethering the pony at night.

Whatever one may say of Tibetans, the best-inclined could not compliment them
on their shooting. Their matchlocks—their only firearms, made in Lhassa and
Shigatz—are weapons so clumsy and heavy and badly made, that when fired it
is truly more dangerous to be behind them than in front of their muzzle. During
my captivity in Tibet in 1897, indeed, I was fired upon twice—by distinguished
marksmen who took accurate aim only a few paces from me—but neither time
was I hit. Nor in all my experience of Tibet have I any remembrance of ever
seeing a Tibetan hit with a projectile from his matchlock anything which he
intended, although the range was never more than twenty or thirty yards. Few
are the matchlocks in the Forbidden Land which will carry as far as fifty or a
hundred yards.