Trend Analysis with Seasonality
Consider the quarterly sales given in the table below.
|
Quarterly Sales | |
|
Year |
Net Sales (millions) |
|
1996 |
$4,053 |
|
1996 |
5,075 |
|
1996 |
5,159 |
|
1996 |
6,050 |
|
1997 |
4,213 |
|
1997 |
5,086 |
|
1997 |
5,362 |
|
1997 |
6,256 |
|
1998 |
4,353 |
|
1998 |
5,258 |
|
1998 |
5,544 |
|
1998 |
7,193 |
|
1999 |
5,114 |
|
1999 |
4,982 |
|
1999 |
4,591 |
|
1999 |
5,680 |
|
2000 |
4,191 |
|
2000 |
4,928 |
|
2000 |
4,909 |
|
2000 |
6,410 |
a. Draw a time series plot for this data set and describe any trend and seasonal behavior that you see.
b. Plot the moving average values on the same graph as the original data. (4 quarters)
c. Find the seasonal index for each quarter. Which is generally the best quarter for sales?
d. Plot the seasonally adjusted series with the original data.
e. Find the regression equation to predict the long-term trend in seasonally adjusted sales for each time period. Does the trend equation show a significant trend over time.
