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A company uses a multiplicative time series model to forecast sales.
The trend in sales is linear and is described by the following equation:
Trend = 400 + 10T
where:
T = 1 denotes the first quarter of 2010,
T = 2 denotes the second quarter of 2010 etc.The average seasonal variations are as follows
quarter 1 2 3 4
% variation -30 +40 +10 -20What is the sales forecast for the third quarter of 2011?
The following data represents a time series :
X 36 Y 41 34 38 42
A series of three points moving averages produced from this data has given the first two values as 38 and 39 .
What are the values of (X ,Y) in the original time series?
(Pls illustrate with the method)Why are you attempting questions for which you do not have an answer? You should be using a Revision Kit from one of the ACCA approved publishers – they have answers!!
First question:
For the third quarter of 2011, T = 7.
So put T = 7 in the trend equation. That gives you the trend so then adjust it by the seasonal variation to get the forecast.Have you watched my free lectures on time series? The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
Second question:
The first moving average is (X + 36 + Y) / 3 and this is equal to 38.
So X + 36 + Y = 3 x 38 = 114
So X + Y = 78The second moving average is (36 + Y + 41) / 3 and this is equal to 39
So 36 + Y + 41 = 3 x 39 = 117
So Y = 117 – 36 – 41 = 40since X + Y = 78, X must be equal to 78 – 40 = 38.
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