Question

2- Make time series scatter plots ofall five varables (five graphs) Insert trend line, equation, and R-squared. Observe graphs and provide interpretation of results. Time Series Plot of DEMAND 0.1173x+14.3 R2-0.47752 25 20 10 10 15 20 25 30 Time Period (EXPLANATION) Time Series Plot of ADV 0.0916x+5.8024 R: 0.66302 10 15 Time Period 20 25 35 (EXPLANATION) Time Series of DIFF y = 0.0163x-0.0552 R2=0.18164 0.8 0.6 0.4 比0.2 35 0.2 -0.4 0.6 0.8 Time Period (EXPLANATION)

Answer 1

2)

From the plot of demand vs time period we see that there is a trend in the data

The seasonality is that the demand drops after every 10 time periods

A r squared value of 0.477 implies that timeperiod can only explain 47.7% of demand

The graph between time period and ADV implies that the forecast is more reliable and there is a satisfactory approximate linear relation between the 2 variables

A r squared value of 0.6630 also implies that there is a linear relation between the 2 variables and time period can explain 66.30% of ADV variable

The graph between time period and DIFF implies that the there is no linear relation between the 2 variables

A r squared value of 0.1816 also implies that there is extremely weak linear relation between the 2 variables

.

The graph between time period and AIP implies that the there is no linear relation between the 2 variables

A r squared value of 0.0845 also implies that there is extremely weak linear relation between the 2 variables

This linear relation is even more weak than the relation between time period and DIFF

The graph between time period and PRICE implies that the PRICE remains almost constant with respect to time period

A r squared value of 0.1474 also implies that there is extremely weak linear relation between the 2 variables

3)

By looking at the DIFF vs demand we see that there is not much fluction in DIFF with respect to demand

The difference is a maximum of 1 positive or negative unit in DIFF  

By looking at the ADV vs demand we see that there is a linear increase in Demand as ADV increases

The R squared value is 0.61 which indicates positive linear relation

Looking at the AIP vs demand we see that there are many values of demand at particular points of AIP

The R squared value of 0.08 also implies that there is weak linear relation and the relation may be non linear

Price vs demand graph implies that the price does not vary significantlt

4)

ADV,DIFF,PRICE AND PERIOD all these variables have r>0.5 hence strong relation

ie all these variables can explain the demand variable significantly

ADV has r-0.79 which is the strongest out of the above variables

5)

The MAD defines the variability of the data

Since the 3 month MAD is less than 6 month MAD

The 3 month values are more accurate

6)

We see that at a alpha of 0.9 we get the least MAD ie 0.6049