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Multiple Choice Questions : Time Series Analysis

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1. Time series methods
a. discover a pattern in historical data and project it into the future.
b. include cause-effect relationships.
c. are useful when historical information is not available.
d. All of the alternatives are true.

2. Gradual shifting of a time series over a long period of time is called
a. periodicity.
b. cycle.
c. regression.
d. trend.

3. Seasonal components
a. cannot be predicted.
b. are regular repeated patterns.
c. are long runs of observations above or below the trend line.
d. reflect a shift in the series over time.

4. Short-term, unanticipated, and nonrecurring factors in a time series provide the random variability known as
a. uncertainty.
b. the forecast error.
c. the residuals.
d. the irregular component.

5. The focus of smoothing methods is to smooth
a. the irregular component.
b. wide seasonal variations.
c. significant trend effects.
d. long range forecasts.

6. Forecast errors
a. are the difference in successive values of a time series
b. are the differences between actual and forecast values
c. should all be non-negative
d. should be summed to judge the goodness of a forecasting model

7. To select a value for alpha for exponential smoothing
a. use a small alpha when the series varies substantially.
b. use a large alpha when the series has little random variability.
c. use any value between 0 and 1
d. All of the alternatives are true.

8. Linear trend is calculated as Tt = 28.5 + .75t. The trend projection for period 15 is
a. 11.25
b. 28.50
c. 39.75
d. 44.25

9. The multiplicative model
a. uses centered moving averages to smooth the trend fluctuations.
b. removes trend before isolating the seasonal components.
c. depersonalizes a time series by dividing the values by the appropriate seasonal index.
d. provides a unique seasonal index for each observation of the time series.

10. Causal models
a. should avoid the use of regression analysis.
b. attempt to explain a time series' behavior.
c. do not use time series data.
d. All of the alternatives are true.

11. A qualitative forecasting method that obtains forecasts through "group consensus" is known as the
a. Autoregressive model
b. Delphi approach
c. mean absolute deviation
d. None of these alternatives is correct.

12. The trend component is easy to identify by using
a. moving averages
b. exponential smoothing
c. regression analysis
d. the Delphi approach

13. The forecasting method that is appropriate when the time series has no significant trend, cyclical, or seasonal effect is
a. moving averages
b. mean squared error
c. mean average deviation
d. qualitative forecasting methods

14. If data for a time series analysis is collected on an annual basis only, which component may be ignored?
a. trend
b. seasonal
c. cyclical
d. irregular

15. One measure of the accuracy of a forecasting model is the
a. smoothing constant
b. trend component
c. mean absolute deviation
d. seasonal index

1. A hospital records the number of floral deliveries its patients receive each day. For a two week period, the records show
15, 27, 26, 24, 18, 21, 26, 19, 15, 28, 25, 26, 17, 23
Use exponential smoothing with a smoothing constant of .4 to forecast the number of deliveries.

2. In order to forecast the attendance at an annual tennis tournament, a model has been developed which uses attendance from the previous year and the amount spent for advertising this year. From the years shown in the table, forecast the attendance for years 2-5 and calculate the forecast error.

Year
Attendance Advertising Expenditure
Forecast
Error
1 8363 750
2 9426 1250
3 9318 3200
4 10206 4500
5 11018 5600

The multiple regression model is Attendance = 6738 + .23($) + .25 (Attlag)

Note: 'Attlag' means last-year's actual attendance. So in forecasting the second year's attendance, we'd use the first year's actual attendance value, and so forth.

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Statistics Study Guide

1. A time series is a collection of data recorded over a period of time, usually monthly, quarterly, or yearly. Two examples of time series are a department store's sales by quarter since opening in 1962 and the annual production of sulfuric acid since 1970.
0True 0False

2. Long-term forecasts are usually more than one year into the future. Projections of 5, 10, 15 and 20 years are common.
0True 0False

3. A statement of the long-term goals of management is considered necessary in order to have the raw materials, production facilities, and staff available to meet the estimated future.
0True 0False

4. One component of a time series is the secular trend. It is the smooth movement of a series over a short period of time, such as a few months or quarters.
0True 0False

5. Episodic and residual variations can be projected into the future.
0True 0False

6. The following linear trend equation was developed for annual sales from 1984 to 1990 with 1984 the base or zero year. Y1 = 500 + 60X (in $ thousands). The estimated sales for 1984 (in $ thousands) is:
a. $ 500
b. $ 560
c. $1,040
d. $1,100
e. None of the above

10. The general equation for the logarithmic trend equation using the coded method is: log of y1 =
a. log a + log b (X)
b. log a x log b (X)
c. a x b (X)
d. a + b (X)
e. None of the above

11. If the exports (in $ millions) for the period 1986 through 1990 were $878, $892, $864, $870 and 912, respectively, what are these values called?
a. Moving average
b. Linear trend equation
c. Logarithmic trend equation
d. Time series
e. None of the above

29. Given a linear time series trend, Y' = 5.2 + 3.1t, what is the forecast for 2002 if the time series started in 1995?
a. 23.8
b. 26.9
c. 30.0
d. 21.7
e. 32.07

30. What is a disadvantage of the estimated method of determining a trend line equation?

a. Provides quick approximations
b. Is subject to human error
c. Provides accurate forecasts
d. Is too difficult to calculate
e. None of the above

31. A logarithmic trend equation should be used for forecasts when the time series is increasing by?

a. Equal amounts
b. Increasing percents
c. Increasing amounts
d. Increasing or decreasing percents
e. None of the above

32. In a seasonal index (4 seasons) the total of the quarterly means will be

a. 4.0
b. 1.0
c. 100%
d. a variable
e. 5.0

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