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TIME SERIES ANALYSIS
Page 2


TIME SERIES ANALYSIS
Introduction:
We know that planning about future is very necessary for the
every business firm, every govt. institute, every individual and for
every country. Every family is also doing planning for his income
expenditure. As like every business is doing planning for
possibilities of its financial resources & sales and for maximization
its profit.
Definition: “A time series is a set of observation taken at
specified times, usually at equal intervals”.
“A time series may be defined as a collection of reading belonging to
different time periods of some economic or composite variables”.
By – Ya-Lun-Chau
? Time series establish relation between “cause” & “Effects” . 
? One variable is  “Time” which is independent variable & and the 
second is “Data” which is the dependent variable.
Page 3


TIME SERIES ANALYSIS
Introduction:
We know that planning about future is very necessary for the
every business firm, every govt. institute, every individual and for
every country. Every family is also doing planning for his income
expenditure. As like every business is doing planning for
possibilities of its financial resources & sales and for maximization
its profit.
Definition: “A time series is a set of observation taken at
specified times, usually at equal intervals”.
“A time series may be defined as a collection of reading belonging to
different time periods of some economic or composite variables”.
By – Ya-Lun-Chau
? Time series establish relation between “cause” & “Effects” . 
? One variable is  “Time” which is independent variable & and the 
second is “Data” which is the dependent variable.
We explain it from the following example:
• From example 1 it is clear that the sale of milk packets is decrease 
from Monday to Friday then again its start to increase.
• Same thing in example 2 the population is continuously increase.
Day No. of Packets of milk sold
Monday 90
Tuesday 88
Wednesday 85
Thursday 75
Friday 72
Saturday 90
Sunday 102
Year Population (in Million)
1921 251
1931 279
1941 319
1951 361
1961 439
1971 548
1981 685
Page 4


TIME SERIES ANALYSIS
Introduction:
We know that planning about future is very necessary for the
every business firm, every govt. institute, every individual and for
every country. Every family is also doing planning for his income
expenditure. As like every business is doing planning for
possibilities of its financial resources & sales and for maximization
its profit.
Definition: “A time series is a set of observation taken at
specified times, usually at equal intervals”.
“A time series may be defined as a collection of reading belonging to
different time periods of some economic or composite variables”.
By – Ya-Lun-Chau
? Time series establish relation between “cause” & “Effects” . 
? One variable is  “Time” which is independent variable & and the 
second is “Data” which is the dependent variable.
We explain it from the following example:
• From example 1 it is clear that the sale of milk packets is decrease 
from Monday to Friday then again its start to increase.
• Same thing in example 2 the population is continuously increase.
Day No. of Packets of milk sold
Monday 90
Tuesday 88
Wednesday 85
Thursday 75
Friday 72
Saturday 90
Sunday 102
Year Population (in Million)
1921 251
1931 279
1941 319
1951 361
1961 439
1971 548
1981 685
Importance of Time Series Analysis:-
As the basis of Time series Analysis businessman can
predict about the changes in economy. There are
following points which clear about the its importance:
1.  Profit of  experience.
2. Safety from future
3. Utility Studies
4. Sales Forecasting 5. Budgetary Analysis
6. Stock Market Analysis 7. Yield Projections
8. Process and Quality Control
9.  Inventory Studies
10. Economic Forecasting
11. Risk Analysis & Evaluation of changes. 
12. Census Analysis 
Page 5


TIME SERIES ANALYSIS
Introduction:
We know that planning about future is very necessary for the
every business firm, every govt. institute, every individual and for
every country. Every family is also doing planning for his income
expenditure. As like every business is doing planning for
possibilities of its financial resources & sales and for maximization
its profit.
Definition: “A time series is a set of observation taken at
specified times, usually at equal intervals”.
“A time series may be defined as a collection of reading belonging to
different time periods of some economic or composite variables”.
By – Ya-Lun-Chau
? Time series establish relation between “cause” & “Effects” . 
? One variable is  “Time” which is independent variable & and the 
second is “Data” which is the dependent variable.
We explain it from the following example:
• From example 1 it is clear that the sale of milk packets is decrease 
from Monday to Friday then again its start to increase.
• Same thing in example 2 the population is continuously increase.
Day No. of Packets of milk sold
Monday 90
Tuesday 88
Wednesday 85
Thursday 75
Friday 72
Saturday 90
Sunday 102
Year Population (in Million)
1921 251
1931 279
1941 319
1951 361
1961 439
1971 548
1981 685
Importance of Time Series Analysis:-
As the basis of Time series Analysis businessman can
predict about the changes in economy. There are
following points which clear about the its importance:
1.  Profit of  experience.
2. Safety from future
3. Utility Studies
4. Sales Forecasting 5. Budgetary Analysis
6. Stock Market Analysis 7. Yield Projections
8. Process and Quality Control
9.  Inventory Studies
10. Economic Forecasting
11. Risk Analysis & Evaluation of changes. 
12. Census Analysis 
Components of Time Series:-
The change which are being in time series, They are
effected by Economic, Social, Natural, Industrial &
Political Reasons. These reasons are called components
of Time Series.
? Secular trend :-
? Seasonal variation :-
? Cyclical variation :-
? Irregular variation :-
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FAQs on PPT - Analysis of Time Series, - Business Mathematics and Statistics - B Com

1. What is time series analysis?
Time series analysis is a statistical method used to analyze and interpret data that is collected over a period of time. It involves studying the patterns, trends, and other characteristics of the data to make predictions or draw conclusions about future behavior.
2. What are the main steps involved in time series analysis?
The main steps involved in time series analysis are as follows: 1. Data collection: Gathering the relevant data over a specific time period. 2. Data preprocessing: Cleaning and preparing the data for analysis, including handling missing values, outliers, and data transformations if necessary. 3. Data visualization: Plotting the time series data to identify any patterns or trends. 4. Decomposition: Separating the time series into its components, such as trend, seasonality, and noise, to better understand its behavior. 5. Modeling: Selecting an appropriate model, such as ARIMA or exponential smoothing, to forecast future values or analyze the relationship between variables. 6. Evaluation: Assessing the accuracy and reliability of the model's predictions using statistical measures. 7. Interpretation: Drawing conclusions and making decisions based on the findings from the analysis.
3. What are the key components of a time series?
A time series typically consists of three main components: 1. Trend: The long-term movement or direction of the data over time. It shows whether the data is increasing, decreasing, or staying relatively constant. 2. Seasonality: The pattern that repeats at regular intervals within the data. It can be daily, weekly, monthly, or any other periodicity. 3. Residuals or noise: The random fluctuations or irregular variations in the data that cannot be explained by the trend or seasonality. It represents the unpredictable component of the time series.
4. What are some common techniques used for time series forecasting?
There are several common techniques used for time series forecasting, including: 1. Autoregressive Integrated Moving Average (ARIMA): A popular model that combines autoregressive (AR), differencing (I), and moving average (MA) components to capture the trend, seasonality, and noise in the data. 2. Exponential Smoothing: A set of methods that assign exponentially decreasing weights to past observations to forecast future values. It is particularly useful for time series data with no trend or seasonality. 3. Seasonal Decomposition of Time Series (STL): A decomposition method that separates a time series into its trend, seasonality, and residuals components using a combination of moving averages. 4. Neural Networks: Machine learning models that can learn complex patterns and relationships in the data to make predictions. They are effective for capturing non-linear trends and seasonality. 5. Vector Autoregression (VAR): A model that considers the interdependencies between multiple time series variables to forecast their future values.
5. How can time series analysis be applied in real-life scenarios?
Time series analysis has various real-life applications, such as: 1. Economic forecasting: Predicting future trends in economic indicators like GDP, inflation, and stock prices. 2. Demand forecasting: Forecasting future demand for products or services to optimize production, inventory management, and resource allocation. 3. Sales forecasting: Predicting future sales based on historical data to aid in business planning, marketing strategies, and budgeting. 4. Weather forecasting: Analyzing historical weather patterns to forecast future weather conditions, aiding in agriculture, transportation, and disaster management. 5. Network traffic prediction: Forecasting future network traffic based on historical data to optimize network capacity and performance. 6. Energy load forecasting: Predicting future energy consumption to enable efficient energy generation, distribution, and pricing strategies. 7. Customer behavior analysis: Understanding and predicting customer behavior based on past interactions to personalize marketing campaigns and improve customer satisfaction.
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