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Secular Trend

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Transcript

  • 1. Secular trend or Long Term Trend Basic tendency of a series to grow or decline over a period of time Steady movements over a long time Ex. Temperature of a particular area would change in various seasons but the normal tendency will remain constant
  • 2. How can we determine trend
    • There are four methods to find Trend
      • Graphical Method
      • (Free hand curve method
      • Method of semi average
      • Method of moving average
      • Method of least square
  • 3. Free hand curve Method
    • Plot the original data on the graph paper
    • Draw a smooth free hand line in such a way that it clearly indicates the tendency of the original data . This line is fitted by merely by inspection
    • The trend line is drawn in such a manner that area of the curve below the line and above the line are the same
  • 4. Question No 1
    • With the Help of the Graph Paper obtain the trend Value
    • Year 1994 1995 1996 1997 1998 1999 2000 2001
    • Value 64 82 97 71 78 112 115 131
  • 5. Merit
    • Simplest
    • Non Mathematical- No calculations
    • Easiest method
    • Can Understand The characteristics of TS
    • Less Time
  • 6. Limitations
    • Not definite
    • We can make different trend lines
    • Not suitable fro further analysis
  • 7. Semi -Average Method
    • Divide the original data into two parts
    • When the number of years is even no problem.
    • If it is odd remove the middle value from the series
    • Figures from the two parts are averaged.
    • The average for each part is plotted on the graph against the middle years of their respective parts
    • The line obtained by joining the two points is the required trend line and may extended both ways to estimate the intermediate or future values
  • 8. Advantage and Disadvantage
    • Those who applied this method will get the same results
    • But this method assumes linear relation ship between the plotted points which may not exist in practice
  • 9. Question 1
    • Fit a trend line to the following data by the method of semi averages and estimate the value for 2004 and 2007
    • Year 91 92 93 94 95 96 97 98 99 00
    • Sales 53 79 76 66 69 94 105 87 79 104
    • (1000 units)
    • Year 01 02 03
    • Sales 97 92 101
  • 10. Home work 1
    • Apply the method of semi averages for determining the trend of the following data and estimate the values for 2000
    • Years 1993 1994 1995 1996 1997 1998
    • Sales 20 24 22 30 28 32
    • (1000 units)
  • 11. Home work 2
    • From the following series of annual data ,find the trend line by the method of semi averages . Also estimate the value for 1999.
    • Year 90 91 92 93 94 95 96 97 98
    • Actual 170 231 261 267 278 302 299 298 340
    • value