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Time series analysis

What is forecasting?

Estimating the future value of a variable e.g sales

Are forecasts always accurate?

They predict future events. Unstable external factors such as economic conditions, changing consumer taste and competitors make predictions uncertain. 

List 2 types of forecasting techniques

  • Qualitative (personal judgement and business experiences)
  • Quantitative (past data and statistical tools)- TIME SERIES ANALYSIS

What is time series analyis?

  • Identifying a pattern in data (trend can be predicted)
  • Set of values observed at regular intervals e.g annually, quarterly and daily
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Time series analysis

4 components of time series analysis

  • Trend- overall, long-term movement
  • Seasonal- regular periodic fluctuations within a 12-month period
  • Cyclical- repeating movements over more than a year
  • Random- erratic random fluctuations

What is a moving average?

A moving average is a technique for smoothing a data series to reveal trends by removing seasonal or cyclical flucuttations

What is extrapolation?

Taking an existing trend and projecting into the future

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Data analysis

Define variance

Shows variability about the mean

Define standard deviation

it is a measure of how widely spread values are from the mean. The closer the data is bunched around the mean, the smaller the standard deviation

Standard deviation: FORMULA


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