NAME: Naima Adnan ENROLLMENT NO: 01-133202-091

Section: BEE-4C SUBMITTED TO: Sir Muneeb Yaqoob

BAHRIA UNIVERSITY ISLAMABAD

COMPLEX ENGINEERING PROPOSAL(CEP)

COURSE: PROBABILITY METHODS IN ENGINEERING

PROJECT NAME:

Time series Generator for forecasting the increase in petrol prices and
dollar exchange rate
PROBLEM STATEMENT..................................................................................1

OBJECT/TOOLS .......................................................................................................... 2

DELIEVERABLES/GOALS ............................................................................................3

FEATURES......................................................................................4

SAMPLE DIAGRAM………………………………………………..…………5

CONCLUSION……………………………………….6
  PROBLEM STATEMENT:
The increase in price of petrol and Exchange rate of dollar greatly effects the growth of our
county. It’s the root cause of inflation as well. In this analysis project, the complex problem of
regulating the exchange rate of dollar in Pakistan is investigated with respect to change in Petrol
prices. The research is conducted at Bahira University Islamabad. The task involves calculating
average of both variables (x = Price of Petrol in Pakistan and y = Exchange rate of dollar in
Pakistan) and finding the corresponding variability. It involves construction of joint distribution
and analyzing the product moment correlation coefficients of the two variables. Afterward
generation of a time series for the data is required for the next five years.

  

 OBJECT/TOOLS:

SPSS SOFTWARE
SPSS Statistics is a statistical software suite developed by IBM for data management,
advanced analytics, multivariate analysis, business intelligence, criminal investigation
 DELIVERABLES/GOALS:
Inflation problem due to uncertainty in Petrol prices and Dollar exchange rate:

Pakistan is a developing country, whose economy is greatly influenced by the petrol prices and
as a consequence dollar exchange rate. Pakistan’s petroleum import bill hit a record height of
$11.69 billion in the first seven months (July-January) of current fiscal year 2021-22 mainly due
to a surge in energy prices in the global market and partly due to a pickup in demand in the
country.
The oil import bill increased by 107% to $11.69 billion in July-January fiscal year 2021-22
compared to $5.64 billion in the same period of previous fiscal year, citing data of the Pakistan
Bureau of Statistics (PBS).Economic theory suggests that the increase in commodity prices
reduces their demand. Accordingly, the drop in demand will help control the import bill and
keep the current account deficit within the projected range. Hence petrol prices directly affect
the economic growth of our country. This research will facilitate the decision making in keeping
balance between oil imports and dollar exchange rate.
 FEATURES:
(1) Finding µ of both variables X and Y.
(2) Calculating σ2 and σ of both variables.
(3) Finding the covariance of the data.
(4) Drawing the scatter diagram and hence prediction of correlation.
(5) Drawing the line of best fit (Regression line).
(6) Finding PMCC (product moment correlation coefficient) for the variables to verify the
correlation.

(7) Develop a model in SPSS to verify your results of part (1) to (5).
(8) Construct a time series of the date to predict increase in X and Y for the next five years.
(9) Finding a 99% confidence interval for validating the time series predictions.
(10) Discuss the inflation rate in Pakistan in context with dollar exchange rate.

Sample Diagram:
 Conclusion:

This project aims at developing a system in spss a software that will help
to calculate verify manual calculations and generate a time series for
forecasting the increase in petrol prices and dollar exchange rate for the
next five years. By treating the two variables as continuous random
variables validate your results using 99% confidence intervals. Also to find
the average increase in petrol prices (X) and dollar exchange rate (Y) per
annum. Calculate measures of central tendency and measures of dispersion
for both variables (for the last 5 years monthly data) .
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