#TIME SERIES REGRESSION EXCEL SERIES#
Top graph is plot of the original data Bottom graph is the log base 10 of the original data which now is linear (Excel function: =log(x) or log(x,10) Using Data Analysis in Excel, generate the linear equation Regression output shown in next slideĢ4 Log Trend Equation – Gulf Shores Importers ExampleĢ5 Log Trend Equation – Gulf Shores Importers ExampleĢ6 Seasonal Variation One of the components of a time series The sales of Jensen Foods, a small grocery chain located in southwest Texas, since 2002 are: Year Sales ($ mil.) 2002 7 29 213 Year t Sales ($ mil.) 2002 1 7 2003 2 10 2004 3 9 2005 4 11 2006 5 13Ģ1 Linear Trend – Using the Least Squares Method: An Example Using ExcelĢ2 Nonlinear Trends A linear trend equation is used when the data are increasing (or decreasing) by equal amounts A nonlinear trend equation is used when the data are increasing (or decreasing) by increasing amounts over time When data increase (or decrease) by equal percents or proportions plot will show curvilinear patternĢ3 Log Trend Equation – Gulf Shores Importers Example let t be 1 for the first year, 2 for the second, and so on (if data are annual)Ģ0 Linear Trend – Using the Least Squares Method: An Example
#TIME SERIES REGRESSION EXCEL CODE#
Use the least squares method in Simple Linear Regression (Chapter 13) to find the best linear relationship between 2 variables Code time (t) and use it as the independent variable E.g.
Compute a three-year moving average and a three-year weighted moving average with weights of 0.2, 0.3, and 0.5 for successive years.ġ7 Linear Trend The long term trend of many business series often approximates a straight lineġ9 Linear Trend – Using the Least Squares Method A partner asks you to study the trend in attendance. Its combined attendance (in thousands) for the last 12 years is given in the following table.
Useful in smoothing time series to see its trend Basic method used in measuring seasonal fluctuation Applicable when time series follows fairly linear trend that have definite rhythmic patternġ2 Three-year and Five-Year Moving AveragesĪ simple moving average assigns the same weight to each observation in averaging Weighted moving average assigns different weights to each observation Most recent observation receives the most weight, and the weight decreases for older data values In either case, the sum of the weights = 1Ĭedar Fair operates seven amusement parks and five separately gated water parks.
Secular Trend – the smooth long term direction of a time series Cyclical Variation – the rise and fall of a time series over periods longer than one year Seasonal Variation – Patterns of change in a time series within a year which tends to repeat each year Irregular Variation – classified into: Episodic – unpredictable but identifiable Residual – also called chance fluctuation and unidentifiableĩ Secular Trend – Manufactured Home Shipments in the U.S. 2 Goals Define the components of a time series Compute moving averageĭetermine a linear trend equation Compute a trend equation for a nonlinear trend Use a trend equation to forecast future time periods and to develop seasonally adjusted forecasts Determine and interpret a set of seasonal indexes Deseasonalize data using a seasonal index Test for autocorrelationĪ collection of data recorded over a period of time (weekly, monthly, quarterly) an analysis of history, it can be used by management to make current decisions and plans based on long-term forecasting Usually assumes past pattern to continue into the future