Forecasting

Question 1

Time Series Forecasting

Answer 1

Plot data to identify any patterns

Identify which components present

Decide on appropriate model

Question 2

Time Series Models

Answer 2

Additive A = T + S + E

Multiplicative A = T x S x E

Question 3

Patterns Analysis

Answer 3

Each week plotted as a separate line shows a similar pattern for each week

Additive most appropriate they a similar nature

Multiplicative much more erratic

Question 4

Building Future Forecast

Answer 4

Estimated Trend

Seasonal Component

Question 5

Reliability of Forecast

Answer 5

Does the forecast fit the data?

Historical Data

Assess residuals

Forecasting error

Question 6

Decomposition Procedure

Answer 6

A = T + S + E - Average to eliminate S leave T + some E

Deduct T from A to leave S and some E: A - T = S + some E

Refine S

Use S to re-estimate T and build model for T: A - S = T + E

Estimate residual A - T - S + = E