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Question
Choose the correct alternative :
What is a disadvantage of the graphical method of determining a trend line?
Options
Provides quick approximations
Is subject to human error
Provides accurate forecasts
Is too difficult to calculate
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Solution
Is subject to human error.
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RELATED QUESTIONS
Fit a trend line to the data in Problem 4 above by the method of least squares. Also, obtain the trend value for the index of industrial production for the year 1987.
Obtain the trend values for the above data using 3-yearly moving averages.
Fill in the blank :
The complicated but efficient method of measuring trend of time series is _______.
State whether the following is True or False :
Graphical method of finding trend is very complicated and involves several calculations.
Fit a trend line to the following data by the method of least squares.
| Year | 1974 | 1975 | 1976 | 1977 | 1978 | 1979 | 1980 | 1981 | 1982 |
| Production | 0 | 4 | 9 | 9 | 8 | 5 | 4 | 8 | 10 |
Solve the following problem :
Obtain trend values for the following data using 5-yearly moving averages.
| Year | 1974 | 1975 | 1976 | 1977 | 1978 | 1979 | 1980 | 1981 | 1982 |
| Production | 0 | 4 | 9 | 9 | 8 | 5 | 4 | 8 | 10 |
Solve the following problem :
Fit a trend line to data in Problem 4 by the method of least squares.
Solve the following problem :
Obtain trend values for the data in Problem 7 using 4-yearly moving averages.
Solve the following problem :
Obtain trend values for data in Problem 10 using 3-yearly moving averages.
Solve the following problem :
Obtain trend values for data in Problem 13 using 4-yearly moving averages.
Solve the following problem :
Fit a trend line to data in Problem 16 by the method of least squares.
Obtain trend values for data in Problem 19 using 3-yearly moving averages.
Choose the correct alternative:
Moving averages are useful in identifying ______.
The method of measuring trend of time series using only averages is ______
State whether the following statement is True or False:
The secular trend component of time series represents irregular variations
State whether the following statement is True or False:
Moving average method of finding trend is very complicated and involves several calculations
Obtain trend values for data, using 4-yearly centred moving averages
| Year | 1971 | 1972 | 1973 | 1974 | 1975 | 1976 |
| Production | 1 | 0 | 1 | 2 | 3 | 2 |
| Year | 1977 | 1978 | 1979 | 1980 | 1981 | 1982 |
| Production | 4 | 6 | 5 | 1 | 4 | 10 |
The following table gives the production of steel (in millions of tons) for years 1976 to 1986.
| Year | 1976 | 1977 | 1978 | 1979 | 1980 | 1981 | 1982 | 1983 | 1984 | 1985 | 1986 |
| Production | 0 | 4 | 4 | 2 | 6 | 8 | 5 | 9 | 4 | 10 | 10 |
Obtain the trend value for the year 1990
Following table shows the all India infant mortality rates (per ‘000) for years 1980 to 2010
| Year | 1980 | 1985 | 1990 | 1995 |
| IMR | 10 | 7 | 5 | 4 |
| Year | 2000 | 2005 | 2010 | |
| IMR | 3 | 1 | 0 |
Fit a trend line by the method of least squares
Solution: Let us fit equation of trend line for above data.
Let the equation of trend line be y = a + bx .....(i)
Here n = 7(odd), middle year is `square` and h = 5
| Year | IMR (y) | x | x2 | x.y |
| 1980 | 10 | – 3 | 9 | – 30 |
| 1985 | 7 | – 2 | 4 | – 14 |
| 1990 | 5 | – 1 | 1 | – 5 |
| 1995 | 4 | 0 | 0 | 0 |
| 2000 | 3 | 1 | 1 | 3 |
| 2005 | 1 | 2 | 4 | 2 |
| 2010 | 0 | 3 | 9 | 0 |
| Total | 30 | 0 | 28 | – 44 |
The normal equations are
Σy = na + bΣx
As, Σx = 0, a = `square`
Also, Σxy = aΣx + bΣx2
As, Σx = 0, b =`square`
∴ The equation of trend line is y = `square`
Obtain trend values for data, using 3-yearly moving averages
Solution:
| Year | IMR | 3 yearly moving total |
3-yearly moving average (trend value) |
| 1980 | 10 | – | – |
| 1985 | 7 | `square` | 7.33 |
| 1990 | 5 | 16 | `square` |
| 1995 | 4 | 12 | 4 |
| 2000 | 3 | 8 | `square` |
| 2005 | 1 | `square` | 1.33 |
| 2010 | 0 | – | – |
Fit equation of trend line for the data given below.
| Year | Production (y) | x | x2 | xy |
| 2006 | 19 | – 9 | 81 | – 171 |
| 2007 | 20 | – 7 | 49 | – 140 |
| 2008 | 14 | – 5 | 25 | – 70 |
| 2009 | 16 | – 3 | 9 | – 48 |
| 2010 | 17 | – 1 | 1 | – 17 |
| 2011 | 16 | 1 | 1 | 16 |
| 2012 | 18 | 3 | 9 | 54 |
| 2013 | 17 | 5 | 25 | 85 |
| 2014 | 21 | 7 | 49 | 147 |
| 2015 | 19 | 9 | 81 | 171 |
| Total | 177 | 0 | 330 | 27 |
Let the equation of trend line be y = a + bx .....(i)
Here n = `square` (even), two middle years are `square` and 2011, and h = `square`
The normal equations are Σy = na + bΣx
As Σx = 0, a = `square`
Also, Σxy = aΣx + bΣx2
As Σx = 0, b = `square`
Substitute values of a and b in equation (i) the equation of trend line is `square`
To find trend value for the year 2016, put x = `square` in the above equation.
y = `square`
Complete the table using 4 yearly moving average method.
| Year | Production | 4 yearly moving total |
4 yearly centered total |
4 yearly centered moving average (trend values) |
| 2006 | 19 | – | – | |
| `square` | ||||
| 2007 | 20 | – | `square` | |
| 72 | ||||
| 2008 | 17 | 142 | 17.75 | |
| 70 | ||||
| 2009 | 16 | `square` | 17 | |
| `square` | ||||
| 2010 | 17 | 133 | `square` | |
| 67 | ||||
| 2011 | 16 | `square` | `square` | |
| `square` | ||||
| 2012 | 18 | 140 | 17.5 | |
| 72 | ||||
| 2013 | 17 | 147 | 18.375 | |
| 75 | ||||
| 2014 | 21 | – | – | |
| – | ||||
| 2015 | 19 | – | – |
Obtain the trend values for the following data using 5 yearly moving averages:
| Year | 2000 | 2001 | 2002 | 2003 | 2004 |
| Production xi |
10 | 15 | 20 | 25 | 30 |
| Year | 2005 | 2006 | 2007 | 2008 | 2009 |
| Production xi |
35 | 40 | 45 | 50 | 55 |
Following table shows the amount of sugar production (in lakh tonnes) for the years 1931 to 1941:
| Year | Production | Year | Production |
| 1931 | 1 | 1937 | 8 |
| 1932 | 0 | 1938 | 6 |
| 1933 | 1 | 1939 | 5 |
| 1934 | 2 | 1940 | 1 |
| 1935 | 3 | 1941 | 4 |
| 1936 | 2 |
Complete the following activity to fit a trend line by method of least squares:
The publisher of a magazine wants to determine the rate of increase in the number of subscribers. The following table shows the subscription information for eight consecutive years:
| Years | 1976 | 1977 | 1978 | 1979 |
| No. of subscribers (in millions) |
12 | 11 | 19 | 17 |
| Years | 1980 | 1981 | 1982 | 1983 |
| No. of subscribers (in millions) |
19 | 18 | 20 | 23 |
Fit a trend line by graphical method.
Fit a trend line to the following data by the method of least square :
| Year | 1980 | 1985 | 1990 | 1995 | 2000 | 2005 | 2010 |
| IMR | 10 | 7 | 5 | 4 | 3 | 1 | 0 |
Complete the following activity to fit a trend line to the following data by the method of least squares.
| Year | 1975 | 1976 | 1977 | 1978 | 1979 | 1980 | 1981 | 1982 | 1983 |
| Number of deaths | 0 | 6 | 3 | 8 | 2 | 9 | 4 | 5 | 10 |
Solution:
Here n = 9. We transform year t to u by taking u = t - 1979. We construct the following table for calculation :
| Year t | Number of deaths xt | u = t - 1979 | u2 | uxt |
| 1975 | 0 | - 4 | 16 | 0 |
| 1976 | 6 | - 3 | 9 | - 18 |
| 1977 | 3 | - 2 | 4 | - 6 |
| 1978 | 8 | - 1 | 1 | - 8 |
| 1979 | 2 | 0 | 0 | 0 |
| 1980 | 9 | 1 | 1 | 9 |
| 1981 | 4 | 2 | 4 | 8 |
| 1982 | 5 | 3 | 9 | 15 |
| 1983 | 10 | 4 | 16 | 40 |
| `sumx_t` =47 | `sumu`=0 | `sumu^2=60` | `square` |
The equation of trend line is xt= a' + b'u.
The normal equations are,
`sumx_t = na^' + b^' sumu` ...(1)
`sumux_t = a^'sumu + b^'sumu^2` ...(2)
Here, n = 9, `sumx_t = 47, sumu= 0, sumu^2 = 60`
By putting these values in normal equations, we get
47 = 9a' + b' (0) ...(3)
40 = a'(0) + b'(60) ...(4)
From equation (3), we get a' = `square`
From equation (4), we get b' = `square`
∴ the equation of trend line is xt = `square`
