Today we are going back in time to help us predict the future!!!

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Today we are going back in time to help us predict the future!!!. Time Series Analysis. The End Result . . . . Lesson Objectives. To understand what Time Series Analysis is To be able to calculate Moving Averages To be able to calculate Variations - PowerPoint PPT Presentation

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Time Series Analysis

Today we are going back in time to help us predict the future!!!Time Series Analysis

The End Result . . . .Lesson ObjectivesTo understand what Time Series Analysis is

To be able to calculate Moving Averages

To be able to calculate Variations

To evaluate how Time Series Analysis can aid management decision making

Forecasting

Identifying the Trend

Work out the moving average for the below figures:19911992199319941995199619971990199920003005006005506007508501,1008001,100Work out the moving average for the below figures:19911992199319941995199619971990199920003005006005506007508501,1008001,100466.7550300+500+600319911992199319941995199619971990199920003005006005506007508501,1008001,100The Answer19911992199319941995199619971990199920003005006005506007508501,1008001,1004675505836337339009171000TASK TIMEDraw the graph (on graph paper):

Show salesShow the 3 point moving average

The GraphYear Sales 0001502603484555706507608759501070Year Sales 000140230370445535675760840985107011501290

The GraphThe 4 Point Moving Average

TASK Calculate the 3 and 4 period moving averages for as many years as you can to complete the table

Plot the sales figures and both trend lines onto a graph using graph paper.

Comment on the relationship between the trend and the actual sales figures.Period12345678910Sales 1001301601751801901901802202503 period 4 periodPeriod12345678910Sales 1001301601751801901901802202503 period 1301551721821871871972174 periodPeriod12345678910Sales 1001301601751801901901802202504 point8 Point4 Point Average565645705735740780840121013501440147515201620VariationVariation = Actual Data Trend Data

Seasonal Variation

1997199819992000Q12341234123412341151011128010513011580105140125105Yr1997199819992000Q1234123412341234150175130115125145135100125136160145Yr1997199819992000Q1234123412341234250275240255230260220180195170140155Advantages of TSA

Disadvantages of TSA

Quick QuestionEvaluate how TSA might assist managerial decision making