Time Series Analysis MBA 1st Year Semester Short Question Answer Study Notes Study Material Notes Unit Wise Syllabus Chapter Wise Notes Time Series Analysis, Concept, Additive And multiplicative models, Components of time series, Trends Analysis, Least squares Method Linear and non linear equations, applications In Business Decision-Making. Index Number Meaning, Types of Index Numbers, Uses Of Index Numbers, Construction Of Price, quantity And Volume Indices Fixed Base and Chain Base Methods.
Short Answer Questions
Q.1. Explain the meaning and importance of time series.
Ans. Meaning of time Series: An arrangement of statistical data in accordance with time of occurrence or in a chronological order is called a time series. The numerical data which we get at different points of time, i.e. the set of observations is known as time series.
Mathematically, a time series is defined by the values Y1, Y2, Y3,…,Yn of a variable y at time t1, t2,…..,tn. Here, Y is a function of time t and y1 tends the value of the variable y at time .
A time series consists of tata arranged chronologically.’
“Time series consists of statistical data which are collected, recorded or observed over successive increments.’
Importance of Time series Analysis
Importance of time series analysis is described as under:
- It Helps in the Analysis of Past Behaviour of a Variable: Analysis of past data discloses the effect of various factors on the variable under study. These studies isolate and analyse thfe effects of various sets of homogeneous factors on the problem under study.
- It helps in Forecasting: The analysis of past conditions is the basis of forecasting the future behavior of the variable under study, e.g. the analysis of a time series relating to inome or wages of production wouldf be the basis for forecasting future income or wages or production. This helps in making future plans of action.
- It helps in Evaluation of Current Achievements: The review and evaluation of progress made on the basis of a plan are done on the basis of time series data ,e.g. the progress of our five-Year plans is judged by the annual growth rates in the gross national products.
- It Helps in Making Comparative Studies: Once the data are arranged, chronological comparison between one time period and another is facilitated. It provides a scientific a scientific basis for making comparisons by studying and isolating the effects of various components of a time series. It also help in making regional comparison amongst data collected on the basis of time.
Q.2. What is a timed series? Explain the objectives of the analysis of a time series.
Ans. Time Series: Time series is a historian series that discloses relationship between two variables. When a quantitative data are arranged in the order of their occurrence, the resulting statistical series is called a time series. Thus, the statistics is a major instrument for predictions. In business economics, international trade, etc. the future has to be devised for planning. Whether it be a case of sales in business, production in industries or agriculture, national income, population, etc. there are fluctuations in the rate of growth or happenings. Thus, time series is a need in the field of economic activities.
Objectives: The main objectives of time series analysis are:
- To study the past behavior of the series, past experience is a guide to the future. Time series analysis only brings to light the salient features of this past experience.
- To forecast the future.
- To isolate the effect of various forces affecting the series.
A time series is the result of the combined effects of different categories of forces like seasonal variations, cyclical variations, irregular variations, etc.
Q.3. Write a note on forecasting techniques.
Ans. Forecasting techniques can be classified into qualitative and quantitative techniques.
- Qualitative Techniques: In this method, the opinions of buyers, sales force and experts could be gathered so as to determine the emerging trend in the market. The qualitative methods of demand forecasting are:
- Consumer survey Method: It is the method of estimating by the survey over consumers regarding products.
- Sales force Opinion Method: This method is regarding survey over opinion of market sales consumers, their interests, etc.
- Quantitative Techniques: These are statistical methods used for making demand projections.
- Trend Projection Method: This method is used to estimate secular trend and trend values with accuracy.
- Regression Method: This method is used to know the best estimate of dependent variables from the values of a variable and hence determine their relationship.