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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
• 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