UNIT-VI

TIME BASED SERIES

Q. No Question
MULTIPLE CHOICE QUESTIONS (1 MARK QUESTIONS)
1. For the given values 23, 32, 40, 47, 58, 33, 42; the 5- yearly moving average are
(a) 38, 40, 42 (b) 40, 42, 44 (c) 40, 42, 46 (d) 42, 44, 46

2. The straight-line trend is represented by the equation:

(a) 𝑦𝑐 = 𝑎 + 𝑏𝑥 (b) 𝑦𝑐 = 𝑎 − 𝑏𝑥
(c) 𝑦𝑐 = 𝑛𝑎 + 𝑏 ∑ 𝑥 (d) 𝑦𝑐 = 𝑛𝑎 − 𝑏 ∑ 𝑥

3. For the given values 15, 23, 28, 36, 41, 46, the 3-yearly moving averages are :
(a) 24, 29, 35, 41 (b) 22, 28, 35, 41 (c) 22, 29, 35, 41 (d) 24, 28, 35, 41

4. Irregular variations in a time series are caused by:

(a)Lockouts and strikes (b)Floods (c) Epidemics (d) All of these

5. The supply of finished goods was delayed for a month due to landslide in hilly terrain. Under
which trend oscillation does this situation fall?
(a) Seasonal (b) Cyclic (c) Secular (d) Irregular

6. For the given five values 35, 70, 36, 59, 64, the three years moving averages are given by:
(a) 47, 53, 55 (b) 53, 47, 45 (c) 47, 55, 53 (d) 45, 55, 57

7. Increase in number of patients in the hospital due to heat stroke is:

(a) seasonal component (b) cyclic component
(c) long term trend (d) irregular component

8. Time series analysis helps to:

(a) understand the behaviour of a variable in the past
(b) predict the future behaviour of a variable
(c) plan future operations
(d) all the above

9. The rise in prices before Diwali is an example of:

(a) seasonal trend (b) cyclic trend (c) long term trend (d) irregular trend

10. The sum of the squares of the deviations of the values of y from their corresponding
trend values is:
(a) least (b) larger (c) zero (d) best fit
11. A factory production is delayed for three weeks due to breakdown of a machine and
unavailability of spare parts. Under which trend oscillation does this situation fall under?
(a) Seasonal (b) Cyclical (c) Secular (d) Irregular
12. For predicting the straight-line trend in the sales of scooters (in thousands) on the basis of 6
consecutive years data, the company makes use of 4-year moving averages method. If the sales
of scooters for respective years are 𝑎, 𝑏, 𝑐, 𝑑, 𝑒 and 𝑓 respectively, then which of the following
average will not be computed?
𝑎+𝑏+𝑐+𝑑 𝑏+𝑐+𝑑+𝑒 𝑎+𝑐+𝑑+𝑒 𝑐+𝑑+𝑒+𝑓
a) (b) (c) (d)
4 4 4 4

13. What kind of progression is made by linear trend values?

(a) A.P. (b) G.P. (c) H.P. (d) none

14. If the growth rate is constant, the trend is:

(a) irregular (b) linear (c) quadratic (d) Growth rate is never constant.

15. Univariate time series refers to a time series that consists of scalar observations recorded
sequentially over:
(a) seasons (b) curves (c) equal time increments (d) unequal time increments.
LONG ANSWER TYPE II (5 MARK QUESTIONS)
16. Fit a straight- line trend by method of least squares to the following data and find the trend
values:

17. When observed over a long period of time, a time series data can predict trend that can
forecast increase or decrease or stagnation of a variable under consideration. Such analytical
studies can benefit a business for forecasting or prediction of future estimated sales or
production.
The table below shows the welfare expenses (in lakh Rs.) of Steel Industry during 2001-
2005. Fit a straight- line trend by the method of least squares and estimate the trend for the
year 2008.

Year 2001 2002 2003 2004 2005

Welfare expenses 160 185 220 300 510
or
Year 2001 2002 2003 2004 2005 2006 2007 2008 2009
Rainfall 1.2 1.9 2 1.4 2.1 1.3 1.8 1.1 1.3

Determine the trend of rainfall by three years moving average and draw the moving average
graph
18. Below are given figures of production (in thousand tons) of a sugar factory.
Year 1995 1996 1997 1998 1999 2000 2001
Production 75 85 99 80 90 91 96
(i) Fit a straight- line trend by method of least squares and show the trend values.
(ii) What is the monthly increase in production?
19. Fit a linear trend to the following data by the least square method

Year 1980 1982 1984 1986 1988

Production 15 20 22 29 17
Also estimate production for the year 1988-89.
20. What is moving average? What are its uses in analysis of time series?
21. Fit the trend of annual sales of a shoe company by moving average method.
Year Annual Year Annual Year Annual
Sales (in Sales (in Sales (in
Rs 000) Rs 000) Rs 000)
1970 50 1977 54 1984 68
1971 52 1978 54 1985 66
1972 50 1979 60 1986 62
1973 54 1980 52 1987 67
1974 59 1981 57 1988 64
1975 56 1982 56 1989 75
1976 53 1983 62 - -
22. Write down the components of time series and describe in details.
23. Write down the difference between Seasonal Variation and Cyclic Variation.
24. Give suitable example in detail for each of the following:
(i) Secular Trend
(ii) Seasonal Trend
(iii) Cyclic Trend
(iv) Irregular/Random Trend
CASE STUDIES (4 MARKS)
25. The following data shows the percentage of rural, urban and sub-urban Indians who have
high speed internet connection at home.

Year Rural Urban Sub- Urban

2016 3 9 9
2017 6 18 17
2018 9 21 23
2019 16 29 29
2020 24 38 40

Based on the above information, answer the following questions.

(i) Derive straight-line trend by the method of least squares for the rural students.
or
Derive straight-line trend by the method of least squares for the urban Indians.
(ii) What is the forecast for the year 2021 for urban group using trend equation?
(iii) What is the forecast for the year 2021 for rural group using trend equation?
26. When observed over a long period of time, a time series data can predict trend that can
forecast increase or decrease or stagnation of a variable under consideration. Such analytical
studies can benefit a business for forecasting or prediction of future estimated sales or
production.
The table below shows the sales of an item in a district during 1996-2001.

Year 1996 1997 1998 1999 2000 2001

Welfare expenses 6.5 5.3 4.3 6.1 5.6 7.8

Based on the above information, answer the following questions.

(i) (i) Determine the equation of the straight-line trend.
(ii) Tabulate the trend values of the years and also compute expected sales trend for
 the year 2002
or
Fit straight- line trend by the method of least squares for the following data.

Year 2004 2005 2006 2007 2008 2009

Welfare expenses 114 130 126 144 138 156
Year 2010
Welfare expenses 164
27. When observed over a long period of time, a time series data can predict trend that
can forecast increase or decrease or stagnation of a variable under consideration. Such
analytical studies can benefit a business for forecasting or prediction of future estimated
sales or production. Mathematically, for finding a line of best-fit to represent a trend,
many methods are available. Methods like moving-averages and least-squares squares
are some of the techniques to predict such trends.

Mr. Anil Kumar runs a rice mill factory and the record of his productions (in metric
tons) for the period of 2012- 2016 is as follows:
Year 2012 2013 2014 2015 2016

productions (m tones) 80 90 92 83 94

Based on the above information, answer the following questions. Show steps to support
your answers.
(i) By taking year 2014 as origin, use method of least-squares to find the best-fit trend line
equation for Mr. Anil Kumar’s rice mill factory. Show the steps of your working.
or
Demonstrate the technique to fit the best-suited straight-line trend by the method of 3-
years moving averages. Also draw the trend line.
(ii) Estimate the likely production of the rice mill factory during 2018?

(iii) Mr. Anil Kumar’s wishes to grow his business to yearly production of 103 tons. In
which year will he be able to reach her target?

28. Today in class Mr. Sharma is teaching the Method of Least Squares to measure the trend in
time series. After explaining the method, he had taken an example: Given below are the data
relating to the sales of a product in a district. Fit a straight line trend by the method of least
squares and tabulate the trend values.
 To solve the given example, he constructed the following table:
Computation of trend values by the method of least squares.

Here n= 8 (even)
2018+2019
So, origin is mean of two middle years i.e., = 2018.5
2
Based on the above information, answer the following questions:
1. If the straight line is yt = a + bx, then what is the value of a?
2. If the straight line is yt = a + bx, then what is the value of b?
3. What is the trend value of 2015?
29. When observed over a long period of time, a time series data can predict trend that can
forecast increase or decrease or stagnation of a variable under consideration. Such analytical
studies can benefit a business for forecasting or prediction of future estimated sales or
production. Mathematically, for finding a line of best-fit to represent a trend, many methods
are available. Methods like moving-averages and least-squares squares are some of the
techniques to predict such trends. Mrs. Shamita runs a bread factory and the record of her sales
of bakery items for the period of 2015- 2019 is as follows:
Year 2015 2016 2017 2018 2019
Sales (in ₹ 35 42 46 41 48
thousands)
Based on the above information, answer the following questions. Show steps to support your
answers.
(i) By taking year 2017 as origin, use method of least-squares to find the best-fit trend
line equation for Mrs. Shamita’s business. Show the steps of your working.
or
 Demonstrate the technique to fit the best-suited straight-line trend by the method
of 3-years moving averages. Also draw the trend line.
(ii) What are the estimated sales for Mrs. Shamita’s business for year 2022?
(iii) Mrs Shamita wishes to grow her business to yearly sale of ₹ 67400. In which year
will she be able to reach her target?
30. To fit a straight line by the method of least squares, Rohit constructed the following table:

The trend equation can be considered as yt = a + bx.

Based on the above information, answer the following questions. Show steps to support your
answers.
(i) What is the value of a in the trend equation?
(ii) What is the value of b in the trend equation?
(iii) Write down the trend equation.
(iv) What is the trend value for year 2015 and 2018?