1. Copyright © 2012 Pearson Education, Inc. All rights reserved. Chapter 10 Introduction to Time Series Modeling and Forecasting

2. Copyright © 2012 Pearson Education, Inc. All rights reserved. Section 10.1 What Is a Time Series

3. Copyright © 2012 Pearson Education, Inc. All rights reserved. Section 10.2 Time Series Components

4. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 4 Figure 10.1 The components of a time series

5. Copyright © 2012 Pearson Education, Inc. All rights reserved. Section 10.3 Forecasting Using Smoothing Techniques

6. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 6

7. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 7 Figure 10.2 MINITAB plot of quarterly power loads

8. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 8

9. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 9 Figure 10.3 MINITAB plot of quarterly power loads and 4-point moving average

10. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 10

11. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 11 Figure 10.4 MINITAB printout of exponentially smoothed quarterly power loads

12. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 12 Figure 10.5 MINITAB plot of exponentially smoothed quarterly power loads

13. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 13

14. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 14

15. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 15

16. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 16

17. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 17

18. Copyright © 2012 Pearson Education, Inc. All rights reserved. Section 10.4 Forecasting: The Regression Approach

19. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 19

20. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 20 Figure 10.6 SAS scatterplot of sales data

21. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 21 Figure 10.7 SAS printout for straight-line model of yearly sales revenue continued on next slide

22. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 22 Figure 10.7 SAS printout for straight-line model of yearly sales revenue (cont’d)

23. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 23 Figure 10.8 SAS printout for quarterly power load model continued on next slide

24. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 24 Figure 10.8 SAS printout for quarterly power load model (cont’d)

25. Copyright © 2012 Pearson Education, Inc. All rights reserved. Section 10.5 Autocorrelation and Autoregressive Error Models

26. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 26 Figure 10.9a Autocorrelation functions for several first-order auto regressive error models: R t =  1 R t-1 +  t

27. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 27 Figure 10.9b Autocorrelation functions for several first-order auto regressive error models: R t =  1 R t-1 +  t

28. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 28 Figure 10.9c Autocorrelation functions for several first-order auto regressive error models: R t =  1 R t-1 +  t

29. Copyright © 2012 Pearson Education, Inc. All rights reserved. Section 10.6 Other Models for Autocorrelated Errors (Optional)

30. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 30 Figure 10.10 Autocorrelations for a first- order moving average model: R t =  t +  t-1

31. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 31 Figure 10.11 Autocorrelations for a fourth-order moving average model

32. Copyright © 2012 Pearson Education, Inc. All rights reserved. Section 10.7 Constructing Time Series Models

33. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 33 Figure 10.12 A seasonal time series model

34. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 34 Figure 10.13 Seasonal model for quarterly data using dummy variables

35. Copyright © 2012 Pearson Education, Inc. All rights reserved. Section 10.8 Fitting Time Series Models with Autoregressive Errors

36. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 36 Figure 10.14 SAS printout for model of annual sales revenue

37. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 37 Figure 10.15 MINITAB residual plot annual sales model

38. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 38 Figure 10.16 SAS printout for annual sales model with autoregressive errors continued on next slide

39. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 39 Figure 10.16 SAS printout for annual sales model with autoregressive errors (cont’d)

40. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 40

41. Copyright © 2012 Pearson Education, Inc. All rights reserved. Section 10.9 Forecasting with Time Series Autoregressive Models

42. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 42

43. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 43 Figure 10.17 SAS printout of forecasts of annual sales revenue using straight-line model with autoregressive errors

44. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 44

45. Copyright © 2012 Pearson Education, Inc. All rights reserved. Section 10.10 Seasonal Time Series Models: An Example

46. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 46 Figure 10.18 Water usage time series

47. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 47 Figure 10.19 SAS printout for time series model of water usage

48. Copyright © 2012 Pearson Education, Inc. All rights reserved. 10- 48 Figure 10.20 Forecasts of water usage

49. Copyright © 2012 Pearson Education, Inc. All rights reserved. Section 10.11 Forecasting Using Lagged Values of the Dependent Variable (Optional)