Page 232 - DMGT404 RESEARCH_METHODOLOGY

Research Methodology

Notes
Adjusted C.R. × 100
The seasonal index of a quarter =
G
Merits and Demerits

This method is less complicated than the ratio to moving average and the ratio to trend methods.
However, this method is based upon the assumption of a linear trend which may not always
hold true.

Remarks: Looking at the merits and demerits of various methods of measuring seasonal
variations, we find that the ratio to moving average method is most general and, therefore,
most popular method of measuring seasonal variations.

Self Assessment

Fill in the blanks:
16. If the time series data are in terms of annual figures, the ……………………are absent.
17. …………………..method is based on the assumption that the trend is linear and cyclical
variations are of uniform pattern.
18. ………………….method is used when cyclical variations are absent from the data

10.7 Summary

 Many types of data are collected over time.

 Stock prices, sales volumes, interest rates, and quality measurements are typical examples.
 Because of the sequential nature of the data, special statistical techniques that account for
the dynamic nature of the data are required.

 A time series is a sequence of data points, measured typically at successive times, spaced
at time intervals.
 Time series analysis comprises methods that attempt to understand such time series, often
either to understand the underlying context of the data points, or to make forecasts.
 Time series forecasting is the use of a model to forecast future events based on known past
events: to forecast future data points before they are measured.

 seasonal variations are likely to be present in data recorded on quarterly or monthly or
weekly or daily or hourly basis.

 There are four methods commonly used for the measurement of seasonal variations. They
are: Method of Simple Averages, Ratio to Trend Method, Ratio to Moving Average Method
and Method of Link Relatives

10.8 Keywords

Mean Squared Error: It is the sum of the squared forecast errors for each of the observations
divided by the number of observations.

Period of Oscillation: The time interval between the variations is known as the period of
oscillation.

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