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Question Sheet 4: Problem 1: Otobi Is A Furniture Manufacturing Company. Since They Started The Company, The Number of

This document contains 6 problems related to time series analysis and price indices. Problem 1 asks to find the linear trend for furniture sales data and estimate 1998 sales. Problem 2 asks to develop linear and quadratic equations to estimate university computer ownership and estimate 1999 levels. Problem 3 asks similar questions for a carpet cleaning business. Problem 4 analyzes sales data for a ceramic company. Problem 5 analyzes pharmaceutical sales data. Problem 6 analyzes zoo food price and quantity data to calculate price indices and comment on expenditure changes.

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253 views4 pages

Question Sheet 4: Problem 1: Otobi Is A Furniture Manufacturing Company. Since They Started The Company, The Number of

This document contains 6 problems related to time series analysis and price indices. Problem 1 asks to find the linear trend for furniture sales data and estimate 1998 sales. Problem 2 asks to develop linear and quadratic equations to estimate university computer ownership and estimate 1999 levels. Problem 3 asks similar questions for a carpet cleaning business. Problem 4 analyzes sales data for a ceramic company. Problem 5 analyzes pharmaceutical sales data. Problem 6 analyzes zoo food price and quantity data to calculate price indices and comment on expenditure changes.

Uploaded by

Junaid
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Question Sheet 4

Problem 1: Otobi is a furniture manufacturing company. Since they started the company, the number of
tables they have sold is represented by this time series:

Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
Table
42 50 61 75 92 111 120 127 140 138
Sold:

1. Find the linear equation that describes the trend in the number of tables sold by Otobi.
2. Estimates their sales of tables in 1998.

Problem 2: The number of faculty owned computers at the university of Ohio increased dramatically
between 1990 and 1995:

Year 1990 1991 1992 1993 1994 1995


Number
50 110 350 1020 1950 3710
of PC

a. Develop a linear estimating equation that best describes the data.


b. Develop a 2nd – degree-estimating equation that best describe the data.
c. Estimate the number of PCs that will be in use at the university in 1999, using both equations.

Problem 3: (Assignment)
Jeff Richardson invested his life savings and began a part time carpet cleaning business in 1986. Since 1986,
Jeff’s reputation has spread and business has increased. The average numbers of homes has cleaned per
month each year are:

Year 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
Turn
6.4 11.3 14.7 18.4 19.6 25.7 32.5 48.7 55.4 75.7 94.3
over

a. Develop a linear estimating equation that best describes the data.


b. Develop a 2nd – degree-estimating equation that best describe the data.
c. Estimate the turn over 1999, using both equations.
Problem 4:
Listed below are the net sales (in million taka) for RAK ceramic industries from its inception in 2000 to
2011.
Year Net sales Year Net sales
2000 9.23 2006 38.43
2001 12.47 2007 45.73
2002 15.47 2008 53.55
2003 19.53 2009 58.24
2004 24.15 2010 64.81
2005 30.21 2011 73.09
For the given data
i. Determine the least squares equation.
ii. Determine the estimated sales for 2012 and 2013.
Problem 5:
a. Listed below are the net sales for the pharmaceutical company for the six years from 2002 to 2009.
The net sales are in millions of taka.
Year Net Sales (in million Tk.) Year Net Sales (in million Tk.)
2004 6714 2008 9762
2005 7991 2009 10180
2006 9075 2010 8334
2007 9775 2011 8272
For the given data
iii. Determine the least squares equation.
iv. Determine the estimated sales for 2012 and 2013.
v. Estimate the trend values.
vi. Graphically show the original trend.

Problem 1:
The western Natural Gas Company has supplied 18, 20, 21, 25 and 26 billion cubic feet of gas, respectively for
the years 1991 to 1995.
a. Find the linear estimating equations that best describe these data.
b. Calculate the percent residual for these data.
c. In which years does the largest fluctuation from trend occur, and is it same for both methods?

Solution: Follow the steps below for required solution:

Step 1: Complete the following table:


Year Y
2
x Y xY x Y^ ×100 Y −Y^
(X) Y^ ×100
Y^
1991 -2 18 - 36 4 17.8 101.12 1.12
1992 -1 20 - 20 1 19.9 100.50 0.50
1993 0 21
1994 1 25
1995 2 26 52 26.2 99.24 - 0.76
0 110 21

Step 2: Calculate the following:

a. a=Ȳ =

b=
∑ xY =
∑ x2
Y^ =
b. See the last column above for percentage of trend.
a. See the last column above for relative cyclical residual.
d. Largest fluctuation (by both methods) was in 1993.

Problem 1: Following table shows the prices and quantities of some of the vegetable items that Mirpur Zoo
authority usually buys to feed their herbivorous animals.
Price in Tk. Quantity
Item (Unit of quantity)
2005 2010 2005 2010
Cabbage (kg) 10 15 2000 1500
Carrot (Bunch) 20 30 200 200
Peas (kg) 20 40 400 500
Spinach (kg) 8 35 100 200
i. Compute Laspeyres price index for 2010 using 2005 as base period
ii. Compute Paasche’s price index for 2010 using 2005 as base period
iii. Compute Dorbish – Bowley’s price index for 2010 using 2005 as base period
iv. Determine Fisher’s ideal index for 2010 using 2005 as base period
Hence comment on the changes in the expenditure of the zoo authority to feed their herbivorous animal.

Question 2:
Following table shows the prices and quantities of some essential commodities for the year 2013 and 2014.
Price in Tk. Quantity
Items (Unit of quantity)
2013 2014 2013 2014
Rice (kg) 32 40 32.0 kg 25.0 kg
Oil (liter) 75 90 4.0 liter 3.0 liter
Lentil (Kg) 60 78 2.0 kg 1.5 kg
Milk (liter) 35 44 20 liter 15 liter
Meat (Kg) 200 240 10.0 kg 7.0 kg
Vegetable (Kg) 12 15 22.0 kg 20.0 kg
Using Fisher’s Ideal Index and Dorbish – Bowley’s methods - comment on the changes in the expenditure.

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