Time Series and Autocorrelation

When using the weighted moving average to forecast future values, what is the range for α?

0.0 ≤ α ≤ 1.0

Which of the following would be a seasonal index that would represent a period with sales below average?

83.25

Which of the following could be exhibited by a trend? Select all that apply.

A general, long-term pattern of no change. A steady, downward, long-term pattern A steady, upward, long-term pattern

All of the following suggest an issue with correlated residuals except which one of the following?

A histogram of residuals not taking a bell-shape.

What technique is used to assign different weights in a time series of data in order to forecast future values?

A weighted moving average.

Regression analysis (i.e. the least squares fit) is often used to find the trend of time series data for the purpose of forecasting. The condition of having highly correlated successive residuals is know as what?

Autocorrelation

What is meant by irregular component in a set of time series data?

Change which cannot be accounted for by the trend, cyclical, or seasonal variation.

Which of the following are examples of time series data? Select all that apply.

Daily high temperature measures for a city. Quarterly sales reports for a corporation.

Which of the following are examples of data that have relatively stable demand patterns? Select all that apply.

Dish soap Paper towels

What is the formula for Forecasting Error?

Forecast Error = Actual - Forecast

What is the formula for simple exponential smoothing?

Forecast t+1 = Forecastt + α (Error)t

Which one of the following is the null hypothesis in a test for autocorrelation?

Ho: No autocorrelation

Which assumption is likely to be violated when regression analysis is used to find the trend line for a time series?

Independence of residuals

The linear trend equation, Time Series = Intercept + Slope x Time Period is very similar to the regression equation. Match the terms to their description.

Intercept matches Choice The Y value when Time Period = 0 Slope matches Choice The slope of the trend line Time Period matches Choice The independent variable Time Series matches Choice The dependent variable

Which of the following is characteristic of cyclical pattern?

It has a period greater than one year.

What is the formula for Mean Absolute Deviation?

MAD = Σ(Error) n

Which of the following are examples of time series data? Select all that apply.

Monthly rainfall over a two year period Monthly shipments of computer and electronic parts

Which of the following are examples of seasonality? Select all that apply.

Monthly temperature measures over a period of five years. Weekly sales of a holiday-themed retail chain over a period of three years.

What types of patterns are characterized by seasonal variation?

Patterns that repeat themselves within each year.

The smallest divisions on a time scale for seasonal variation could be which of the following? Choose two answers.

Quarterly Monthly

Time series data contains a Trend, and Cyclical, Seasonal variation and an Irregular component. What are the characteristics of a seasonal pattern?

Recurring pattern of highs and lows corresponding to specific time periods.

Which of the following describes the purpose behind deseasonalizing data?

Removing seasonal fluctuations allows for trend and cycle to be studied.

Which one of the following is not a potential consequence of having correlated residuals?

Seasonal indexes may not be correctly calculated.

Which of the following is accomplished by a moving average? Select all that apply.

Smoothing a time series to see its trend. Measuring the seasonal fluctuation of the data.

Which one of the following is an example of cyclical pattern?

The business cycle, where expansion and recession follow each other about every six years.

Which statement best describes forecasting error?

The difference between the actual observation and the forecast

Which of the following would be an example of a trend?

The general increase in enrollment at a university over ten years.

Which is a good estimate of the typical error in forecasted values?

The mean of the absolute errors

What is meant by cyclical patterns in time series data?

The rise and fall of a time series over periods of time longer than a year.

Which of the following would be a correct interpretation of a season with a sales index of 113.6?

The sales for that period is 13.6% higher than average annual sales.

What is the formula for the linear trend equation?

Time Series = Intercept + Slope x Time Period

True or false: A basic requirement of a time series approach to forecasting is that historical data follows a pattern.

True

Which of the following statements are true regarding the Durbin-Watson statistic, d?

Values close to 2 indicate no autocorrelation. Values close to 0 indicate positive autocorrelation.

Define residual (or random) variations in the context of time series data.

Variations that cannot be identified as cyclical, seasonal, or episodic.

Which of the following statements represent true descriptions of the values associated with the Durbin-Watson statistic, d? Select all that apply.

d ≈ 0 means strong positive autocorrelation d = 2 means no autocorrelation 0 < d < 4

When using the weighted moving average to forecast future values, what is the symbol for the smoothing constant?

α