DBD205-DHA-DHA2-2018

Q1. Graph a Time Series (generate your own data for this purpose) that shows seasonal and trend
component.
Sol.: Following data is generated by my own for showing graphically seasonal and trend component
of time series.

Quarter
Year
1 2 3 4
1 4.8 4.1 6.0 6.5
2 5.8 6.2 6.8 7.4
3 6 5.6 7.5 7.8
4 6.3 5.9 8.0 8.4
Below calculation and graph is developed through Excel software:

Yt = St* It * Tt
 Yt = Sales (in 1000s)
 t = Time
 MA (4) = Moving average for four quarter
 CMA (4) = Central Moving Average
 St = Seasonal Component
 Tt = Trend Component
 It = Irregularity Component

 Quarterly Data for Cars Sales 

        Baseline    
Yt Yt / CMA Yt / S t

t Year Quarte Sales(1000s MA (4) CMA (4) St, It St De-seasonalise Tt

r )
1 Year 1 1 4.8       0.93 5.16 5.25
2   2 4.1       0.84 4.88 5.39
3   3 6.0 5.4 5.5 1.10 1.09 5.50 5.54
4   4 6.5 5.6 5.7 1.13 1.15 5.65 5.69
5 Year 2 1 5.8 5.9 6.0 0.97 0.93 6.24 5.84
6   2 5.2 6.1 6.2 0.84 0.84 6.19 5.98
7   3 6.8 6.3 6.3 1.08 1.09 6.24 6.13
8   4 7.4 6.4 6.4 1.16 1.15 6.43 6.28
9 Year 3 1 6.0 6.5 6.5 0.92 0.93 6.45 6.42
10   2 5.6 6.6 6.7 0.84 0.84 6.67 6.57
11   3 7.5 6.7 6.8 1.11 1.09 6.88 6.72
12   4 7.8 6.8 6.8 1.14 1.15 6.78 6.87
13 Year 4 1 6.3 6.9 6.9 0.91 0.93 6.77 7.01
14   2 5.9 7.0 7.1 0.83 0.84 7.02 7.16
15   3 8.0 7.2     1.09 7.34 7.31
16   4 8.4       1.15 7.30 7.45
 Time Series Plot of Car Sales

8.5

7.5

6.5

5.5

4.5

3.5
1 2 3 4 5 6 7 8 9 10 11 12

Sales(1000s) CMA(4) Tt

Interpretation: We clearly can see from the above graph that there is some pattern in sales line of
cars, in every year there is a dip and a climax which seems to be a cycle, or we can call seasonality
because this cycle repeating itself along with a year. Another thing is the overall curve is linearly
increasing in upward direction. Hence, the trend line is linear in nature.