Post on 25-Feb-2016
description
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
• To evaluate how Time Series Analysis can aid management decision making
Forecasting
Identifying the Trend
Work out the moving average for the below figures:
1991 1992 1993 1994 1995 1996 1997 1990 1999 2000
300 500 600 550 600 750 850 1,100 800 1,100
Work out the moving average for the below figures:
1991 1992 1993 1994 1995 1996 1997 1990 1999 2000
300 500 600 550 600 750 850 1,100 800 1,100
466.7 550300+500+600
3
1991 1992 1993 1994 1995 1996 1997 1990 1999 2000
300 500 600 550 600 750 850 1,100 800 1,100
The Answer
1991 1992 1993 1994 1995 1996 1997 1990 1999 2000
300 500 600 550 600 750 850 1,100 800 1,100
467 550 583 633 733 900 917 1000
TASK TIME
• Draw the graph (on graph paper):
• Show sales• Show the 3 point moving average
The Graph
1991 1992 1993 1994 1995 1996 1997 1990 1999 20000
200
400
600
800
1000
1200
Sales3 Point Moving Average
Year Sales £000
1 50
2 60
3 48
4 55
5 70
6 50
7 60
8 75
9 50
10 70
Year Sales £000
1 40
2 30
3 70
4 45
5 35
6 75
7 60
8 40
9 85
10 70
11 50
12 90
The Graph
1991 1992 1993 1994 1995 1996 1997 1990 1999 20000
200
400
600
800
1000
1200
Sales3 Point Moving Average
The 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.
Period 1 2 3 4 5 6 7 8 9 10
Sales
100
130
160
175
180
190
190 180
220
250
3 period
4 period
Period 1 2 3 4 5 6 7 8 9 10
Sales
100
130
160
175
180
190
190 180
220
250
3 period
130
155
172
182
187
187 197
217
4 period
Period 1 2 3 4 5 6 7 8 9 10
Sales
100
130
160
175
180
190
190 180
220
250
4 poin
t
8 Poin
t
4 Poin
t Average
565
645
705
735
740 780 840
1210 1350 1440
1475
1520
1620
Variation
• Variation = Actual Data – Trend Data
Seasonal Variation
1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0Q 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
115 101 112 80 105 130 115 80 105 140 125 105
Yr 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0
Q 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
150 175 130 115 125 145 135 100 125 136 160 145
Yr 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0Q 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
250 275 240 255 230 260 220 180 195 170 140 155
Advantages of TSA
Disadvantages of TSA
Quick Question
Evaluate how TSA might assist managerial decision
making