ECON 2331: Economic and Business Statistics 2 1

Assignment 5, Part A (100 marks: 5%)

Toreceivefullmarks,youneedtoshowallyourwork,includingalltheprintouts.

1. ThedailysalesfiguresshownherehavebeenrecordedforAppleiPhone6in
westernCanadaduringthelastmonth:(13markstotal)
Weeks
Day 1 2 3 4
Monday 38 46 35 59
Tuesday 40 36 52 53
Wednesday 17 32 25 28
Thursday 20 17 28 33
Friday 26 20 32 20
a. Computethethreedayandfivedaymovingaverages;i.e.,3MAand
5MA.(4marks)
b. Plottheseriesandthemovingaveragesonthesamegraph.Doesthere
appeartobeaseasonal(weekly)pattern?Forthissales,wouldyouprefer
touse3MAor5MA?Why?(6marks)
c. Calculatethefivedaycenteredmovingaverages(3marks)
2. ThevaluesofAlabamabuildingcontracts(in$millions)fora12month
periodfollow:(19markstotal)
240350230260280320220310240310240230
a. Constructatimeseriesplot.Whattypeofpatternexistsinthedata?
(4marks)
b. Comparethethreemonthmovingaverageapproachwiththeexponential
smoothingforecastusing=0.4.Whichapproachprovidesmoreaccurate
forecastsbasedonMSE?(6marks)
c. Whatistheforecastforthenextmonth?(3marks)
d. Explainhowyouwouldfindtheoptimumlevelofforthisdata.(6marks)

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2 Assignment 5

3. AirpollutioncontrolspecialistsinsouthernCaliforniamonitortheamountof
ozone,carbondioxide,andnitrogendioxideintheaironanhourlybasis.The
hourlytimeseriesdataexhibitseasonality,withthelevelsofpollutants
showingpatternsthatvaryoverthehoursintheday.OnJuly15,16,and17,
thefollowinglevelsofnitrogendioxidewereobservedforthe12hoursfrom
6:00A.M.to6:00P.M.(14markstotal)
July 15: 25 28 35 50 60 60 40 35 30 25 25 20
July 16: 28 30 35 48 60 65 50 40 35 25 20 20
July 17: 35 42 45 70 72 75 60 45 40 25 25 25

a. Constructatimeseriesplot.Whattypeofpatternexistsinthedata?
(4marks)
b. Usethefollowingdummyvariablestodevelopanestimatedregression
equationtoaccountfortheseasonaleffectsinthedata.(10marks)
Hour1=1ifthereadingwasmadebetween6:00A.M.and7:00A.M.;Zero
otherwise.
Hour2=1ifthereadingwasmadebetween7:00A.M.and8:00A.M.;Zero
otherwise.
Hour11=1ifthereadingwasmadebetween4:00P.M.and5:00P.M.;Zero
otherwise.
Note:thatwhenthevaluesofthe11dummyvariablesareequaltozero,the
observationcorrespondstothe5:00P.M.to6:00P.M.Hour.
c. Usingtheestimatedregressionequationdevelopedinpart(a),compute
estimatesofthelevelsofnitrogendioxideforJuly18.(4marks)
d. Lett=1torefertotheobservationinhour1onJuly15;t=2torefertothe
observationinhour2ofJuly15;andt=36torefertotheobservationin
hour12ofJuly17.Usingthedummyvariablesdefinedinpart(b)andint,
developanestimatedregressionequationtoaccountforseasonaleffects
andanylineartrendinthetimeseries.Basedupontheseasonaleffectsin
thedataandlineartrend,computeestimatesofthelevelsofnitrogen
dioxideforJuly18.(14marks)

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ECON 2331: Economic and Business Statistics 2 3

4. Thequarterlysalesdata(numberofcopiessold)foracollegetextbookover
thepastthreeyearsfollow:(36markstotal)
Year Quarter Sales
1 1 1690
2 940
3 2625
4 2500
2 1 1800
2 900
3 2900
4 2360
3 1 1850
2 1100
3 2930
4 2615
a. Constructatimeseriesplot.Whattypeofpatternexistsinthedata?
(4marks)
b. Showthefourquarterandcenteredmovingaveragevaluesforthistime
series.(5marks)
c. Computetheseasonalandadjustedseasonalindexesforthefourquarters.
(5marks)
d. Whendoesthepublisherhavethelargestseasonalindex?Doesthisresult
appearreasonable?Explain.(6marks)
e. Deseasonalizethetimeseries.(4marks)
f. Computethelineartrendequationforthedeseasonalizeddataand
forecastsales,usingthelineartrendequation.(8marks)
g. Adjustthelineartrendforecasts,usingtheadjustedseasonalindexes
computedinpart(c).(4marks)

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4 Assignment 5

Assignment 5, Part B (100 marks; 10%)

Toreceivefullmarks,youneedtoshowallyourwork,includingalltheprintouts.
TheaimofAssignment5,PartBistoexplainthestatisticaltechniques, tools,and
methodscoveredinthiscoursebyapplyingthemin realworldexamples.
Youmustapply at leastoneofthetechniques/methodslearnedinthiscoursetoreal
worlddatainatleastonearea ofBusinessandEconomics.Thedataforsuchacase
couldeither beprimary or secondary. Theexpectedlengthofthisassignmentis
1,000words. Ascanofallyourdata,outputs,and findingsfromyoursoftware
(e.g.,Excel,orXLSTAT)mustbeincludedintheappendixoftheassignment(andis
notincludedinthewordcount).

Topics
TopicsforthisassignmentaretobeproposedbyyouandapprovedbyyourOpen
LearningFacultyMember.YoumaystartwiththeCaseProblemsprovidedatthe
endofchaptersofthetextbookandextendthetechniquesorupdatethedataof
theCaseProblemstorealworlddata.Alternatively,youmayapply the
techniquescovered in thiscourse to yourchoiceofrealworlddata.Ineithercase,
thetopicandthemethodsyouselectforthisassignmentmustfirstbeapprovedby
yourOpenLearningFacultyMember.

Data
Youmayobtaintherequireddatafrom the industry/place you work, or would
liketowork.
YoucanalsoobtainthedatafromThompsonRiversUniversityLibrary.Seethe
CourseGuideformoreaboutthelibraryorvisitthelibrarysDROLwebsiteat
http://www.tru.ca/library/services/distance.html.

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ECON 2331: Economic and Business Statistics 2 5

Grading
Thisassignmentwillbegradedbasedonthefollowingcriteria:

Criteria for Assignment Available Mark

Mark Given

Relevantandclear titlewithatitle 5
page,studentname,studentnumber
andashortbiography.Thedocument
istyped,doublespacedandlooks
Abstract:250words(notincludedin 10
the1,000wordcountforthemain
Introduction 5

Objective(s) 8

Methodology 15

EmpiricalResults 25

Conclusions 7

Discussions 5

FutureResearch 5

References(minimum3references) 10

Appendices(allsoftwareprintoutsare 5
included)
100
TotalMarkoutof100:

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