INTRODUCTION
A time series consists of numerical data collected. observed or recorded at more or less regular intervals of time each hour, day, month, quarter or year. Examples of time series are the hourly temperature recorded, annual rain fall, etc.
SCATTER DIAGRAM
Scatter diagram is a graphic picture of the sample data. In scatter diagram different points are plotted. Due to fluctuations which includes seasonal, cyclical etc line is not drawn straight so we have to draw line of best fit.
TIJRND
A trend is a long term movement that persist for many years and indicates the general directicon of the change of observed values.
GRAPH (LONG TERM CHANGE)
SEASONAL VARIATIONS
Variation which is caused by the change in seasons. Prices of different goods and services changes with the change in season. The main cause for seasonal variation are weather conditions, festival and customs.For example sale of ice cream are high in the summer season, sale of sweators are high in the winter season and low in the summer season. This represents seasonal fluctuation.
CYCLICAL VARIATIONS
These fluctuations occur around a long-term growth trend.There are two periods in the business cycle one is boom when economic activities and growth is high with increase demand for goods and services. This increases sales and business activity. Other period is recession when economic activity is down, prices decreases due to decrease demand for goods and services unemployment increases and economic activity slows down.
This shows economic cycle you can see fluctuation in the 2 periods.
ANALYSING THE TREND
2 Methods are used
- Semi averages method
- Moving averages method
THE METHOD OF SEMI AVERAGES
Divide the values in the series in the two equal parts. Find the averages of the values in each part and plot the average values against the midpoint of two parts. Then draw the straight line.
This straight line can be described by the mathematical equation
y=mx+c
m=gradient (RATE)
c=y intercept
x and y=constant
EXAMPLE
Year
|
Profit
|
Total
|
Averages
|
 2005 |
10
| ||
2006
|
50
|
210
|
70
|
2007
|
150
| ||
 2008 |
80
| ||
2009
|
120
|
300
|
100
|
2010
|
100
|
GRAPH
Author: Saif Kheraj
