Deck 14: Time-Series Forecasting and Index Numbers

Question 1

The overall upward or downward pattern of the data in an annual time series will be contained in the ________ component.

A)trend
B)cyclical
C)irregular
D)seasonal

Answer 1

trend

Question 2

The cyclical component of a time series

A)represents periodic fluctuations which reoccur within 1 year.
B)is obtained by adjusting for calendar variation.
C)represents periodic fluctuations which usually occur in 2 or more years.
D)is obtained by adding up the seasonal indexes.

Answer 2

represents periodic fluctuations which usually occur in 2 or more years.

Question 3

Based on the following scatter plot,which of the time-series components is not present in this quarterly time series?

A)irregular
B)trend
C)cyclical
D)seasonal

Answer 3

cyclical

Question 4

When using the exponentially weighted moving average for purposes of forecasting rather than smoothing,

A)the previous smoothed value becomes the forecast.
B)the next smoothed value becomes the forecast.
C)the current smoothed value becomes the forecast.
D)None of the above.

Question 5

What type of forecasting is based entirely on the past and present values of a variable?

A)Economic forecasting.
B)Time-series forecasting.
C)Casual forecasting.
D)Qualitative forecasting.

Question 6

The annual multiplicative time-series model does not possess ________ component.

A)a trend
B)a cyclical
C)an irregular
D)a seasonal

Question 7

One reason to use quantitative forecasting methods is if historical data are not available.

Question 8

Which of the following statements about moving averages is NOT true?

A)It gives equal weight to all values in the computation.
B)It is simpler than the method of exponential smoothing.
C)It gives greater weight to more recent data.
D)It can be used to smooth a series.

Question 9

After estimating a trend model for annual time-series data,you obtain the following residual plot against time. The problem with your model is that

A)the cyclical component has not been accounted for.
B)the irregular component has not been accounted for.
C)the trend component has not been accounted for.
D)the seasonal component has not been accounted for.

Question 10

Which of the following methods should not be used for short-term forecasts into the future?

A)Exponential smoothing.
B)Linear trend model.
C)Moving averages.
D)Autoregressive modelling.

Question 11

After estimating a trend model for annual time-series data,you obtain the following residual plot against time. The problem with your model is that

A)the cyclical component has not been accounted for.
B)the seasonal component has not been accounted for.
C)the irregular component has not been accounted for.
D)the trend component has not been accounted for.

Question 12

The method of moving averages is used

A)in regression analysis.
B)to exponentiate a series.
C)to smooth a series.
D)to plot a series.

Question 13

Which of the following terms describes the overall long-term tendency of a time series?

A)Seasonal component.
B)Cyclical component.
C)Trend.
D)Irregular component.

Question 14

A trend is a persistent pattern in annual time-series data that has to be followed for several years.

Question 15

The fairly regular fluctuations that occur within each year would be contained in the ________ component.

A)trend
B)cyclical
C)irregular
D)seasonal

Question 16

Leading indicator forecasting is an example of

A)casual forecasting.
B)qualitative forecasting.
C)econometric forecasting.
D)historical forecasting.

Question 17

The effect of an unpredictable,rare event will be contained in the ________ component.

A)trend
B)cyclical
C)irregular
D)seasonal

Question 18

The monthly publication of the quarterly GDP of a country is an example of a(n)________.

Question 19

Instruction 14-1
The number of cases of chardonnay wine sold by a Barossa Valley Winery in an 8-year period follows.
$$\begin{array} { c c } \text { Year } & \text { Cases of Wine } \\\hline1991 & 270 \\1992 & 356 \\1993 & 398 \\1994 & 456 \\1995 & 438 \\1996 & 478 \\1997 & 460 \\1998 & 480\end{array}$$

-Referring to Instruction 14-1,does there appear to be a relationship between year and the number of cases of wine sold?

A)No,there appears to be no relationship between the year and the number of cases of wine sold by the vintner.
B)Yes,there appears to be a negative nonlinear relationship between the year and the number of cases of wine sold by the vintner.
C)Yes,there appears to be a slight negative linear relationship between the year and the number of cases of wine sold by the vintner.
D)Yes,there appears to be a slight positive relationship between the year and the number of cases of wine sold by the vintner.

Question 20

Which of the following terms describes the up and down movements of a time series that vary both in length and intensity?

A)Trend.
B)Seasonal component.
C)Cyclical component.
D)Irregular component.

Question 21

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,a centred 5-year moving average is to be constructed for the wine sales.The moving average for 2005 is ________.

Question 22

Instruction 14-2
The following table contains the number of complaints received in a department store for the first 6 months of last year.
$$\begin{array} { l l } \text { Month } & \text { Complaints } \\\hline\text { January } & 36 \\\text { February } & 45 \\\text { March } & 81 \\\text { April } & 90 \\\text { May } & 108 \\\text { June } & 144\end{array}$$

-Referring to Instruction 14-2,suppose the last two smoothed values are 81 and 96 (Note: They are not).What would you forecast as the value of the time series for September?

A)91
B)86
C)96
D)81

Question 23

Which of the following statements about the method of exponential smoothing is NOT true?

A)It can be used for forecasting.
B)It gives greater weight to the earlier observations in the series.
C)It gives greater weight to more recent data.
D)It uses all earlier observations in each smoothing calculation.

Question 24

Given a data set with 15 yearly observations,a 3-year moving average will have fewer observations than a 5-year moving average.

Question 25

Instruction 14-2
The following table contains the number of complaints received in a department store for the first 6 months of last year.
$$\begin{array} { l l } \text { Month } & \text { Complaints } \\\hline\text { January } & 36 \\\text { February } & 45 \\\text { March } & 81 \\\text { April } & 90 \\\text { May } & 108 \\\text { June } & 144\end{array}$$

-Referring to Instruction 14-2,if a three-term moving average is used to smooth this series,what would be the second calculated value?

A)36
B)72
C)54
D)40.5

Question 26

Instruction 14-2
The following table contains the number of complaints received in a department store for the first 6 months of last year.
$$\begin{array} { l l } \text { Month } & \text { Complaints } \\\hline\text { January } & 36 \\\text { February } & 45 \\\text { March } & 81 \\\text { April } & 90 \\\text { May } & 108 \\\text { June } & 144\end{array}$$

-Referring to Instruction 14-2,if this series is smoothed using exponential smoothing with a smoothing constant of 1/3,what would be the first value?

A)39
B)42
C)45
D)36

Question 27

Instruction 14-2
The following table contains the number of complaints received in a department store for the first 6 months of last year.
$$\begin{array} { l l } \text { Month } & \text { Complaints } \\\hline\text { January } & 36 \\\text { February } & 45 \\\text { March } & 81 \\\text { April } & 90 \\\text { May } & 108 \\\text { June } & 144\end{array}$$

-Referring to Instruction 14-2,if this series is smoothed using exponential smoothing with a smoothing constant of 1/3,what would be the second value?

A)53
B)39
C)45
D)42

Question 28

Given a data set with 15 yearly observations,there are only seven 9-year moving averages.

Question 29

Given a data set with 15 yearly observations,there are only thirteen 3-year moving averages.

Question 30

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,a centred 3-year moving average is to be constructed for the wine sales.The result of this process will lead to a total of ________ moving averages.

Question 31

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,a centred 3-year moving average is to be constructed for the wine sales.The moving average for 2004 is ________.

Question 32

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,a centred 3-year moving average is to be constructed for the wine sales.The moving average for 2007 is ________.

Question 33

Instruction 14-2
The following table contains the number of complaints received in a department store for the first 6 months of last year.
$$\begin{array} { l l } \text { Month } & \text { Complaints } \\\hline\text { January } & 36 \\\text { February } & 45 \\\text { March } & 81 \\\text { April } & 90 \\\text { May } & 108 \\\text { June } & 144\end{array}$$

-Referring to Instruction 14-2,if this series is smoothed using exponential smoothing with a smoothing constant of 1/3,what would be the third value?

A)68
B)81
C)65.33
D)53

Question 34

Instruction 14-2
The following table contains the number of complaints received in a department store for the first 6 months of last year.
$$\begin{array} { l l } \text { Month } & \text { Complaints } \\\hline\text { January } & 36 \\\text { February } & 45 \\\text { March } & 81 \\\text { April } & 90 \\\text { May } & 108 \\\text { June } & 144\end{array}$$

-Referring to Instruction 14-2,suppose the last two smoothed values are 81 and 96 (Note: They are not).What would you forecast as the value of the time series for July?

A)86
B)91
C)96
D)81

Question 35

Instruction 14-2
The following table contains the number of complaints received in a department store for the first 6 months of last year.
$$\begin{array} { l l } \text { Month } & \text { Complaints } \\\hline\text { January } & 36 \\\text { February } & 45 \\\text { March } & 81 \\\text { April } & 90 \\\text { May } & 108 \\\text { June } & 144\end{array}$$

-Referring to Instruction 14-2,if a three-term moving average is used to smooth this series,how many values would it have?

A)5
B)3
C)2
D)4

Question 36

If you want to recover the trend using exponential smoothing,you will choose a weight (W)that falls in the range

A)[0.2,0.4].
B)[0.6,0.8].
C)[0.8,1.0].
D)[0,0.2].

Question 37

Which of the following is NOT an advantage of exponential smoothing?

A)It enables us to smooth out cyclical components.
B)It enables us to perform more than one-period ahead forecasting.
C)It enables us to perform one-period ahead forecasting.
D)It enables us to smooth out seasonal components.

Question 38

Instruction 14-2
The following table contains the number of complaints received in a department store for the first 6 months of last year.
$$\begin{array} { l l } \text { Month } & \text { Complaints } \\\hline\text { January } & 36 \\\text { February } & 45 \\\text { March } & 81 \\\text { April } & 90 \\\text { May } & 108 \\\text { June } & 144\end{array}$$

-Referring to Instruction 14-2,if a three-term moving average is used to smooth this series,what would be the last calculated value?

A)93
B)72
C)114
D)126

Question 39

Instruction 14-2
The following table contains the number of complaints received in a department store for the first 6 months of last year.
$$\begin{array} { l l } \text { Month } & \text { Complaints } \\\hline\text { January } & 36 \\\text { February } & 45 \\\text { March } & 81 \\\text { April } & 90 \\\text { May } & 108 \\\text { June } & 144\end{array}$$

-Referring to Instruction 14-2,if this series is smoothed using exponential smoothing with a smoothing constant of 1/3,how many values would it have?

A)3
B)6
C)4
D)5

Question 40

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,a centred 5-year moving average is to be constructed for the wine sales.The number of moving averages that will be calculated is ________.

Question 41

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,exponential smoothing with a weight or smoothing constant of 0.2 will be used to smooth the wine sales.The value of E₄,the smoothed value for 2006 is ________.

Question 42

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,exponential smoothing with a weight or smoothing constant of 0.2 will be used to forecast wine sales.The forecast for 2011 is ________.

Question 43

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,the Holt-Winters method for forecasting with smoothing constant of 0.2 for both level and trend will be used to smooth the wine sales.The smoothed values of the level and trend for 2005 are ________ and ________,respectively.

Question 44

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,exponential smoothing with a weight or smoothing constant of 0.4 will be used to smooth the wine sales.The value of E₅,the smoothed value for 2007 is ________.

Question 45

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,exponential smoothing with a weight or smoothing constant of 0.4 will be used to smooth the wine sales.The value of E₂,the smoothed value for 2004 is ________.

Question 46

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,the Holt-Winters method for forecasting with smoothing constant of 0.2 for both level and trend will be used to smooth the wine sales.The smoothed values of the level and trend for 2010 are ________ and ________,respectively.

Question 47

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,the Holt-Winters method for forecasting with smoothing constant of 0.8 for both level and trend will be used to smooth the wine sales.The smoothed values of the level and trend for 2010 are ________ and ________,respectively.

Question 48

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,exponentially smooth the wine sales with a weight or smoothing constant of 0.4.

Question 49

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,exponential smoothing with a weight or smoothing constant of 0.2 will be used to smooth the wine sales.The value of E₂,the smoothed value for 2004 is ________.

Question 50

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,the Holt-Winters method for forecasting with smoothing constant of 0.8 for both level and trend will be used to smooth the wine sales.The smoothed values of the level and trend for 2005 are ________ and ________,respectively.

Question 51

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,the Holt-Winters method for forecasting with smoothing constant of 0.8 for both level and trend will be used to forecast the wine sales.The forecast for 2011 is ________.

Question 52

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,the Holt-Winters method for forecasting with smoothing constant of 0.8 for both level and trend will be used to forecast the wine sales.The forecast for 2014 is ________.

Question 53

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,the Holt-Winters method for forecasting with smoothing constant of 0.2 for both level and trend will be used to forecast the wine sales.The forecast for 2014 is ________.

Question 54

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,use the Holt-Winters method of fitting wine sales to compute the smoothed level and trend with a smoothing constant of 0.2 for both level and trend.

Question 55

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,exponentially smooth the wine sales with a weight or smoothing constant of 0.2.

Question 56

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,a centred 5-year moving average is to be constructed for the wine sales.The moving average for 2008 is ________.

Question 57

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,the Holt-Winters method for forecasting with smoothing constant of 0.2 for both level and trend will be used to smooth the wine sales.The smoothed values of the level and trend for 2004 are ________ and ________,respectively.

Question 58

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,the Holt-Winters method for forecasting with smoothing constant of 0.2 for both level and trend will be used to forecast the wine sales.The forecast for 2011 is ________.

Question 59

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,the Holt-Winters method for forecasting with smoothing constant of 0.8 for both level and trend will be used to smooth the wine sales.The smoothed values of the level and trend for 2004 are ________ and ________,respectively.

Question 60

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,exponential smoothing with a weight or smoothing constant of 0.4 will be used to forecast wine sales.The forecast for 2011 is ________.

Question 61

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the Holt-Winters method for forecasting with smoothing constant of 0.3 for both level and trend will be used to smooth the number of arrivals.The smoothed values of the level and trend for the second Monday are ________ and ________,respectively.

Question 62

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the Holt-Winters method for forecasting with smoothing constant of 0.9 for both level and trend will be used to smooth the number of arrivals.The smoothed values of the level and trend for the sixth Monday are ________ and ________,respectively.

Question 63

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the number of arrivals will be smoothed with a 3-term moving average.There will be a total of ________ smoothed values.

Question 64

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the number of arrivals will be smoothed with a 3-term moving average.The last smoothed value will be ________.

Question 65

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the Holt-Winters method for forecasting with smoothing constant of 0.3 for both level and trend will be used to smooth the number of arrivals.The smoothed values of the level and trend for the sixth Monday are ________ and ________,respectively.

Question 66

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the number of arrivals will be exponentially smoothed with a smoothing constant of 0.25.The smoothed value for the third Monday will be ________.

Question 67

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the number of arrivals will be exponentially smoothed with a smoothing constant of 0.1.The smoothed value for the sixth Monday will be ________.

Question 68

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the Holt-Winters method for forecasting with smoothing constant of 0.3 for both level and trend will be used to forecast the number of arrivals.The forecast for the seventh Monday is ________.

Question 69

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the number of arrivals will be smoothed with a 5-term moving average.The first smoothed value will be ________.

Question 70

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the number of arrivals will be smoothed with a 3-term moving average.The first smoothed value will be ________.

Question 71

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the number of arrivals will be exponentially smoothed with a smoothing constant of 0.1.Then the forecast for the seventh Monday will be ________.

Question 72

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the Holt-Winters method for forecasting with smoothing constant of 0.9 for both level and trend will be used to smooth the number of arrivals.The smoothed values of the level and trend for the second Monday are ________ and ________,respectively.

Question 73

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,use the Holt-Winters method of fitting wine sales to compute the smoothed level and trend with a smoothing constant of 0.8 for both level and trend.

Question 74

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,plot both the wine sales series and the series of Holt-Winters forecast for 2011 to 2014 using a smoothing constant of 0.2 for both level and trend.

Question 75

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the number of arrivals will be smoothed with a 5-term moving average.The last smoothed value will be ________.

Question 76

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the number of arrivals will be exponentially smoothed with a smoothing constant of 0.25.The smoothed value for the second Monday will be ________.

Question 77

Instruction 14-9
The number of cases of merlot wine sold by a Barossa Valley Winery in an 8-year period follows.

Referring to Instruction 14-9,plot both the wine sales series and the series of Holt-Winters forecast for 2011 to 2014 using a smoothing constant of 0.8 for both level and trend.

Question 78

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the number of arrivals will be exponentially smoothed with a smoothing constant of 0.25.The forecast of the number of arrivals on the seventh Monday will be ________.

Question 79

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the Holt-Winters method for forecasting with smoothing constant of 0.3 for both level and trend will be used to forecast the number of arrivals.The forecast for the twelfth Monday is ________.

Question 80

Instruction 14-10
The number of train passengers arriving in Adelaide on the Overland on 6 successive Mondays were: 60,72,96,84,36,and 48.
Referring to Instruction 14-10,the number of arrivals will be exponentially smoothed with a smoothing constant of 0.1.The smoothed value for the second Monday will be ________.