# Time Series Regression

**Topics:**Errors and residuals in statistics, Forecasting, Statistics

**Pages:**2 (352 words)

**Published:**April 3, 2013

3.1A small regional trucking company has experienced steady growth. Use time series regression to forecast capital needs for the next 2 years. The company's recent capital needs have been:

══════════════════════════════════════════════

Capital Needs Capital Needs

(Thousands Of (Thousands Of

Year Dollars)Year Dollars)

------------------------------------------- --------------------------------------------

1100 3130

2110 4140

5160

══════════════════════════════════════════════ perform a regression analysis and forecast sales for the next two years:

Exponential Smoothing

3.33The Sporting Charge Company buys large quantities of copper that is used in its manufactured products. Bill Bray is developing a forecasting system for copper prices. He has accumulated this historical data:

CopperCopper

Price/Price/

MonthPoundMonthPound

1$0.99$ 9$0.98$

20.97100.91

30.92110.89

40.96120.94

50.93130.99

60.97140.95

70.95150.92

80.94160.97

a.Use exponential smoothing to forecast monthly copper prices. Compute what the forecasts would have been for all the months of historical data for = 0.1, = 0.3, and = 0.5 if the forecast for all ’s in the first month was $0.99.

b.Which alpha () value results in the least mean absolute deviation over the 16-month period?

c.Use the alpha () from Part b to compute the forecasted copper price for Month 17.

Integrated Products Corporation (IPC) needs to estimate its sales for next year. The most recent six years of revenue data for the company’s line of XT computers are found in the table below:

Sales RevenuesSales Revenues

Year...

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