Give answers in the tables where necessary [eg for trend values of several months]

Assignment

Deadline 19^th Nov. 2015

Give answers in the tables where necessary [eg for trend values of several months]

QUESTION 1

A] What is time series analysis and what are its objectives?  [3mks]

B] Highlight briefly the 4 different types of variations in time series            [8mks]

C] There are 4 methods of fitting the trend in time series:                

I] Free hand method

III] Moving Average

IV] Method of least Square

Required: briefly explain each of the methods           [6mks]

e] The data below relates the production of items in a certain factory for a period of 10 months.

Required

A]Compute the linear trend equation using the method of least squares       [4mks]

B]Compute the trend values of each month using the trend line equation                [3mks]

C]Compute the monthly demand forecast for 4^th month through 11^th month using a simple 3-month moving average                                                                                    [3mks]

B] Compute the monthly demand forecast for 4^th month through 11^th monthusing a 3-month weighted moving average. Use weights of 0.6, 0.3, and 0.1.                  [3mks]

QUESTION 2

Table below presents the predicted one-year return [payoff] of a $1,000 investment in each stock under each economic condition

Required

A.    The stock to purchase under Maximin criterion [5mks]

B.     The stock to purchase under maximax criterion [5mks]

C.     The decision tree [5mks]

D.    The opportunity loss table [5mks]

End