# 2 Economics Time Series Questions Excel or Eviews (Bid 6 Hours Bcz I need it

economics multi-part question and need the explanation and answer to help me learn.

2 Economics Time Series Questions Excel or Eviews (Bid 6 Hours Bcz I need it in 6 Hours)

Q6 and Q9 all parts

Requirements: All answers

Question 6

Barbara Lynch, the product manager for a line of skiwear produced by HeathCo

Industries, has been working on developing sales forecasts for the skiwear that is

sold under the Northern Slopes and Jacque Monri brands. She has had various

regression-based forecasting models developed (see Exercises 7 and 8 in Chapter 4

and Exercises 6 and 7 in Chapter 5). Quarterly sales for 1998 through 2007 are as

follows:

(c6p6)

Quarterly Sales ($000) at End-Month of Quarter

Year March June September December

1998 72,962 81,921 97,729 142,161

1999 145,592 117,129 114,159 151,402

2000 153,907 100,144 123,242 128,497

2001 176,076 180,440 162,665 220,818

2002 202,415 211,780 163,710 200,135

2003 174,200 182,556 198,990 243,700

2004 253,142 218,755 225,422 253,653

2005 257,156 202,568 224,482 229,879

2006 289,321 266,095 262,938 322,052

2007 313,769 315,011 264,939 301,479

a. Prepare a time-series plot of the data, and on the basis of what you see in the plot,

write a brief paragraph in which you explain what patterns you think are present in

the sales series.

b. Smooth out seasonal influences and irregular movements by calculating the cen-

tered moving averages. Add the centered moving averages to the original data you

plotted in part (a). Has the process of calculating centered moving averages been

effective in smoothing out the seasonal and irregular fluctuations in the data? Ex-

plain.

c. Determine the degree of seasonality by calculating seasonal indices for each quar-

ter of the year. Do this by finding the normalized average of the seasonal factors for

each quarter, where the seasonal factors are actual sales divided by the centered

moving average for each period. If you have done Exercise 7 in Chapter 5, explain

how these seasonal indices compare with the seasonality identified by the regres-

sion model.

d. Determine the long-term trend in the sales data by regressing the centered moving

average on time, where T = 1 for Mar-98. That is, estimate the values for b0 and b1

for the following model:

CMAT = b0 + b1(T)

Plot this equation, called the centered moving-average trend (CMAT), along with

the raw data and the CMA on the same plot developed in part (a).

e. Find the cycle factor (CF) for each quarter by dividing the CMA by the CMAT. Plot

the cycle factors on a new graph and project (CF) forward through Dec-08.

wil73648_ch06.qxd 11/6/08 10:28 AM Page 329

f. Develop a forecast for Ms. Lynch for the four quarters of 2008 by calculating the

product of the trend, the seasonal index, and the cycle factor. Given that actual sales

(in thousands of dollars) were 334,271, 328,982, 317,921, and 350,118 for quarters

1 through 4, respectively, calculate the RMSE for this model based only on the

2008 forecast period.

Question 9

The Bechtal Tire Company (BTC) is a supplier of automotive tires for U.S. car com-

panies. BTC has hired you to analyze its sales. Data from 1976Q1 through 2007Q4 are

given in the following table (in thousands of units):

wil73648_ch06.qxd 11/6/08 10:28 AM Page 332

Time-Series Decomposition 333

(c6p9) BTC Sales of Tires

Year Q1 Q2 Q3 Q4

1986 2,029 2,347 1,926 2,162

1987 1,783 2,190 1,656 1,491

1988 1,974 2,276 1,987 2,425

1989 2,064 2,517 2,147 2,524

1990 2,451 2,718 2,229 2,190

1991 1,752 2,138 1,927 1,546

1992 1,506 1,709 1,734 2,002

1993 2,025 2,376 1,970 2,122

1994 2,128 2,538 2,081 2,223

1995 2,027 2,727 2,140 2,270

1996 2,155 2,231 1,971 1,875

1997 1,850 1,551 1,515 1,666

1998 1,733 1,576 1,618 1,282

1999 1,401 1,535 1,327 1,494

2000 1,456 1,876 1,646 1,813

2001 1,994 2,251 1,855 1,852

2002 2,042 2,273 2,218 1,672

2003 1,898 2,242 2,247 1,827

2004 1,669 1,973 1,878 1,561

2005 1,914 2,076 1,787 1,763

2006 1,707 2,019 1,898 1,454

2007 1,706 1,878 1,752 1,560

a. Write a report to Bechtal Tire Company in which you explain what a time-series de-

composition analysis shows about its tire sales. Include in your discussion seasonal,

cyclical, and trend components. Show the raw data, the deseasonalized data, and

the long-term trend on one time-series plot. Also provide a plot of the cycle factor

with a projection through 2008.

b. In the last section of your report, show a time-series graph with the actual data and

the values that the time-series decomposition model would predict for each quarter

from 1986Q3 through 2007Q4, along with a forecast for 2008. If actual sales for

2008 were Q1 = 1,445.1, Q2 = 1,683.8, Q3 = 1,586.6, and Q4 = 1,421.3, what

RMSE would result from your 2008 forecast