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# Given the quarterly production figures of the company for the last 4 years, explain the procedure to compute seasonal indices by the ‘link relatives’ method.

Statistics

MST 4104 – Time Series Analysis

Assignment 1 (Total Marks = 10)

Question 1 (a)

(b) Plot a time series graph for the above data.

(c) Plot the corresponding trend line using the method of moving average.

State the conditions under which the Moving Average method can be recommended for trend analysis? How will you determine the period of the moving average? Calculate the 4-yearly moving average of the following data relating to sales in a departmental store:

• Year 2000 2001 2002 2003 2004 2005  2006  2007
• Sales 960   976   974 996   1024  1040  1688  1128
• Year 2008 2009 2010 2011 2012 2013 2014  2015
• Sales 1144 1120  1140  1168  1196  1212  1200 1180

Question 2

Explain what is meant by seasonal fluctuations of a time series. A company manufactures bicycles. Given the quarterly production figures of the company for the last 4 years, explain the procedure to compute seasonal indices by the ‘link relatives’ method. Use link- relatives method to compute seasonal indices from the recorded production figures given below:

YEAR  Q1   Q2 Q3   Q4

2016  420  414  502  365

2017  491   456  516   337

2018  463  365   478  310

2019  502  487   536  404