05 - Forecasting - Statistical Techniques

Question 1

What is a time series analysis?

Answer 1

A series of figures recorded over a period of time, for example - sales per month over the last three years

Question 2

What is a trend?

Answer 2

A underlying long term movement in a consistent direction, over a prolonged period of time

Question 3

What is seasonal variation?

Answer 3

Predictable, recurring fluctuations over the short term, typically up to a year. For example, and ice cream van will make more sales in summer and less in winter

Question 4

What is cyclical variation?

Answer 4

Recurring patterns similar to seasonal variation but tend to occur over a longer period of time which is usually not fixed in length. For example, the economic cycle - where we move from recession to boom but we can’t see how quickly we move between the two

Question 5

What is random variation?

Answer 5

Unpredictable fluctuations cause by random events such as natural disaster or war

Question 6

What are flexible budgets?

Answer 6

When multiple budget are prepared to show a wide range of possibilities, for example - one for the bast case scenario, one for the worst case scenario and a few middle of the range scenarios

Question 7

What is an index number?

Answer 7

A figure used to make comparisons easy to ready quickly, normally compared to a number such as 100 so its easy to see a 5% increase if the comparison is 105 which might not always be so visible if the numbers aren’t whole

Question 8

What is the formula for calculating an index number?

Answer 8

Current year figure / base year figure x 100