PRESENTATION ON TIME

SERIES

PRESENTED BY:-
KHUSHBU SINHA
&
ROHIT KUMAR
 INTRODUCTION

 Time series analysis is used to detect

patterns of change in statistical
information over regular intervals of time.


 We project these patter to arrive at an

estimate for the future. thus, time series
analysis helps us scope with certainty
about the future.


EXAMPLE: BLOOD PRESSURE
OF RAT
AIMS OF TIME SERIES
ANALYSIS
 1. Description
 Describe a generating process using its time series.


 2. Explanation
 If time series is bi-variate or multi-variate , then it may
be
 possible to use variations in one variable to explain
the variations in another variable.


 3. Prediction
 Use the knowledge of the past of the time series to
predict its future.



 IMPORTANCE

 SEARCHING FOR THE CAUSES OF THE ECONOMIC CHANGE IS ONE

OF MOST DIFFICULT ANLYTICAL PROBLEMS IN BUSINESS AND
ECONOMICS. THE SEARCH REQUIRE, ANALYSIS OF TIME SERIES
DATA.


 THUS, ANALYSIS OF TIME SERIES IS A GREAT IMPORTANCE TO

STATICIAN TOWARDS PRACTICAL APPLICATION OF STATISTICAL DATA
PERTAINING TO THE FIELD OF BUSINESS
 AND ECONOMICS. APART FROM THIS,


1. IT HELPS IN UNDERSTANDING PAST BEHAVIOUR.

2. IT HELPS IN FORECASTING AND PLAN.
3. IT HELPS IN EVALUATING THE PRESENT ACCOMPLISHMENT.
4. A COMPARISON CAN BE MADE BETWEEN THE BEHAVIOUR OF
DIFFERENT TIME.
1.

 COMPONENTS OF TIME
SERIES

 WE USE TERM TIME SERIES TO REFER TO ANY GROUP OF

STATISTICAL INFORMATION ACCUMULATED TO REGULAR
INTERVALS.
 THESE ARE FOUR KINDS OF CHANGE , OR VARIATION
INVOLVED IN TIME SERIES ANLYSIS:-


 1. SECULAR TREND
 2. CYCLIC FLUCTUATION
 3. SEASONAL VARIATION
 4. IRREGULAR VARIATION
2.

 1. SECULAR TREND

 WITH THE FIRST TYPE OF CHANGE, SECULAR

TREND, THE VALUE OF THE VARIABLE TRENDS
TO INCREASE OR DECREASE OVER A LONG TIME
OF PERIOD. IT REPRESENTS THE LONG-TERM
DIRECTION OF THE SERIES.
 SO, ONE WAY TO DESCRIBE THE TREND
COMPONENT IS TI FIT A LINE VISUALLY TO A SET
OF POINTS ON A GRAPH. TRENDS CAN BE
LINEAR OR CURVILINEAR.
 REASON S FOR STUDYING
TRENDS
 1. THE STUDY OF SECULAR TREND ALLOWS US TO DESCRIBE
A HISTORICAL PATTERN.
 FOR EX- A UNIVERSITY MAY EVALUATE THE
EFFECTIVENESS OF A RECRUITING PROGRAM BY
EXAMINING ITS PAST ENROLLMENT TREND.
2. IT PERMITS US TO PROJECT PAST PATTERNS, OR TRENDS
INTO THE FUTURE.
 FOR EX- CAN HELP US ESTIMATE THE POPULATION FOR
SOME FUTURE TIME.
3. AND IT ALSO ALLOWS US TO ELMINATE THE TRENS
COMPONENT FROM THE SERIES.WHICH MAKE US EASY TO
STUDY THE OTHER THREE COMPONENTS OF THE TIME
SERIES.IT GIVES US MORE ACCURATE IDEA OF THE
SEASONAL COMPONENT.
3.
 MEASUREMENT OF SECULAR
TREND
 Following are the principal method of estimating the secular
movements:-


 A. FREEHAND CURVE METHOD



 B. METHOD OF AVERAGES
 a. semi averages
 b. Moving averages
C. METHOD OF LEAST SQUARES


A. FREEHAND CURVE
METHOD
 This term is used to any non-mathematical curve in statistical
analysis, even when it is drawn with the aid of drafting. The
curve should be drawn through the graph of the data in such a
way that the areas above or below the trend are equal.


MERITS:-
1. Time and labour is saved.

2. More flexible than rigid mathematical function.

3. It makes possible rapid approximations of trend i.e. reliable.

DEMERITS:-


1. It is highly subjective.
2. It has little value as a bias of projection for future.
3.
4.



 B. METHOD OF AVERAGES
a. SEMI AVERAGE METHOD:- this methods employed when
a straight line appears to be an adequate expression of
trend. In this, data are divided into two equal halves, and
simple arithmetic mean of each half is computed.
b. MOVING AVERAGES METHOD:- like semi averages, this
method also employs arithmetic means of items. But in
this, there are so many averages as there are items in the
series, except as averages may be calculated for
3,4,5,7,8,9 yearly periods. Averages are taken from
overlapping periods.
a.
b.
 FITTING THE LINEAR TREND
BY THE LEAST SQUARE
METHOD
 THE WAY TO DESCRIBE SECULAR TREND BY LENEAR METHOD
OR STRAIGHT LINE METHOD IS FOLLOWS:-


 EQUATION TO ESTIMATING A STRAIGHT LINE:-




Ye =a +bX
Where,


= Estimated value of the dependent variable.

Ye
X= independent variable.(time in tend analysis)

a= y-intercept(where the value of y=0).

b= slop of the trend line.

 2. CYCLIC VARIATION

It tends to move above and below the secular trend

line for periods longer than 1 year. The most

common example of this, is cyclic fluctuation in

business cycle.

The procedure used to identify cyclical variations is

the residual method.

Percent of trend=
y / ye 100
*


Where Y= actual time series

And y=eestimated trend value from the same point
in he time series.
 CALCULATION OF RELATIVE
CYCLIC RESIDUALS
X YEAR Y ACTUAL Ye=ESTIMA PERSCENT OF CYCLIC
BUSHELS T-ED Y / Ye *1 0 0
TREND= RESIDUA
BUSHELS L=P.T*100
1988 7.5 7.6 98.7 -1.3
1989 7.8 7.8 100.0 0.0
1990 8.2 8.0 102.5 2.5
1991 8.2 8.2 100.0 0.0
1992 8.4 8.4 100.0 -1.2
1993 8.5 8.6 98.8 -1.2
1994 8.7 8.8 98.9 -1.1
1995 9.1 9.0 101.1 1.1
 3. SEASONAL VARIATION
 SEASONAL VARIATION IS DEFINED THAT REPETITIVE AND
PREDICTABLE MOVEMENT AROUND THE TREND LINE IN
ONE YEAR OR LESS.IN ORDER TO DETECT SEASONAL
VARIATIN, TIME INTERVALS MUST BE MEASURED IN SMALL
UNITS, SUCH AS DAYS, WEEKS, MONTHS, OR QUARTERS.
IT GENERALLY REFER TO THE ANNUAL PATTERNS OF
ECONOMIC ACTIVITY.


FOLLOWING ARE THE MAIN REASONS TO STUDYING

SEASONAL VARIATION:-
1. we can establish the pattern of past change.

2. To aid in short term forecasting and planning.

3. To compare changes in seasonal patterns, year after year.

1.

USES OF THE SEASONAL
INDEX

1.It allows us to identify seasonal variation

in a time series.
2.It is used to remove the effect of
seasonality from a time series.
3.Once we have removed the seasonal
variation, we can compute a
deseasonalized trend line, which we can
then project into the future.
4.
 4. IRREGULAR VARIATION

 It is the final component of a time series.

 It represents the residual variation after
trend.
 It occurs over short intervals and follows a
random pattern.
 Because of the unpredictability of irregular
variation, we do not attempt to explain it
mathematically.


 WE STUDY IRREGULAR
VARIATION UNDER
FOLLOWING HEADS
1. planning for the future is facilitated.
2. For time analysis and determination of the

statistical position of an enterprise.

3. For time series analysis and control.

4. Reduction of undesirable variation.

5. For analysis of time series and economic.

 TIME SERIES ANALYSIS IN
FORECASTING
 We must realize that the mechanical approach of time series
is subject to considerable error ad change. It’s necessary for
management to combine these simple procedures with
knowledge of other factors in order to develop workable
forecast. Analyst are constantly revising, updating, and
discarding their forecasts. If we wish to cope successfully
with the future, we must do the same.


When using the procedures, we should pay particular attention

to two problems:-
1. In forecasting, we project past trend and seasonal variation

into the future. We must ask, ” how regular and lasting

were the past trends? What are the chances that these
patterns are changing?
2. How accurate are the historical data we use in time series

analysis?
 REFERENCE

 BY THE BOOK OF STATICS FOR

MANAGEMENT.


 WRITTEN BY:- 1.RICHARD I. LEVIN

 2. DAVID S. RUBIN

THANK


 YOU

Success is the ability
to go from one failure
to another with no
loss of enthusiasm.
