The Time series is collecting of data over a period of time can be daily, monthly and yearly in which can be used in order to setup and plan based on long term forecasting.
An easiest way to solve "The general Trend Equation" for a time series
1. The General Trend Equation easy way
Year Sales Visitors
2011 59,586,865.701 21056
2012 63,586,865.20 22544
2013 69,146,590.30 17493
2014 75,833,718.40 24945
2015 83,133,971.20 28427
2016 64,626,260.30 17927
2017 95,246,656.40 25490
2. Solution
Thecompany will use the general trend equation in order to estimate
the sales and visitors as below.
Y = a + b x
Rules
Where
b = ــــــــــــ
∑ Y
n
a = ــــــــــــ
∑ xy
∑ x
₂
ᶺ
3. Estimate Sales for Years 2018,2019,2020,2021
Year Sales X XY x
2011 59,586,865.701 -3 -178,760,597.10 9
2012 63,586,865.20 -2 -127,173,730.40 4
2013 69,146,590.30 -1 -69,146,590.30 1
2014 Base Year 75,833,718.40 0 0.00 0
2015 83,133,971.20 1 83,133,971.20 1
2016 64,626,260.30 2 129,252,520.60 4
2017 95,246,656.40 3 285,739,969.20 9
511,160,927.501 0 123,045,543.20 28
₂
4. Y = a + b x
Rules
Where b = ــــــــــــ
∑ Y
n
a = ــــــــــــ
∑ xy
∑ x
₂
ᶺ
a = ـــــــــــــــــــــــ
511,160,927.501
7
a = 73,022,989.64
b = ــــــــــــ
123,045,543.20
ـــــــــــ
28
b = 43,944,83.686
Y = 73,022,989.64 + 43,944,83.686 (X) where x estimated Year
ᶺ
5. Estimate Sales for Years 2018,2019,2020,2021
Year 2018
“Base Year – Estimated Year” 2018-2014 = 4 , X= 4
Y = 73,022,989.64 + 43,944,83.686 (4) = 90,600,924.384ᶺ
Year 2019
“Base Year – Estimated Year” 2019-2014 = 5 , X= 5
Y = 73,022,989.64 + 43,944,83.686 (5) = 94,995,408.07
Year 2020
“Base Year – Estimated Year” 2020-2014 = 6 , X= 6
Y = 73,022,989.64 + 43,944,83.686 (6) = 99,389,891.756
Year 2021
“Base Year – Estimated Year” 2021-2014 = 7 , X= 7
Y = 73,022,989.64 + 43,944,83.686 (7) = 103,784,375.442
6. Estimate number of visitors for Years 2018,2019,2020,2021
Year No of Visitor X XY x
2011 21056 -3 -63168 9
2012 22544 -2 -45088 4
2013 17493 -1 -17493 1
2014 Base Year 24995 0 0 0
2015 28427 1 28427 1
2016 17927 2 35854 4
2017 25490 3 76470 9
157932 0 15002 28
7. Y = a + b x
Rules
Where b = ــــــــــــ
∑ Y
n
a = ــــــــــــ
∑ xy
∑ x
₂
ᶺ
a = ـــــــــــــــــــــــ157932
7
a = 22561.71
b = ــــــــــــ
15002
ـــــــــــ
28
b = 535.79
Y = 22561.71 + 535.79 (X) where x estimated Year
ᶺ
8. Estimate Sales for Years 2018,2019,2020,2021
Year 2018
“Base Year – Estimated Year” 2018-2014 = 4 , X= 4
Y = 22562 + 536 (4) 24706ᶺ
Year 2019
“Base Year – Estimated Year” 2019-2014 = 5 , X= 5
Y = 22562 + 536 (5 ) 25242
Year 2020
“Base Year – Estimated Year” 2020-2014 = 6 , X= 6
Y = 22562 + 536 (6) 25778
Year 2021
“Base Year – Estimated Year” 2021-2014 = 7 , X= 7
Y = 22562 + 536 (7) 26314