Question 3 The following ACF plots were produced for raw data of monthly sales of two different variables, A and B. a) Explain which variable is likely to be easier to forecast. b) Explain how your answer to part a) would change if these were residuals of an ARIMA model instead of "raw data of monthly sales". Variable A: 0.15- 0.10 - 0.05 - 0.00 -0.05 - -0.10 - -0.15- 10 15 20 Variable B: 1.00 - 0.75- 0.50- 0.25- 0.00 lag (1M]

Question 3 The following ACF plots were produced for raw data of monthly sales of two different variables, A and B. a) Explain which variable is likely to be easier to forecast. b) Explain how your answer to part a) would change if these were residuals of an ARIMA model instead of "raw data of monthly sales". Variable A: 0.15- 0.10 - 0.05 - 0.00 -0.05 - -0.10 - -0.15- 10 15 20 Variable B: 1.00 - 0.75- 0.50- 0.25- 0.00 lag (1M]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The following ACF plots were produced for raw data of monthly sales of two different variables, A and B.

a) Explain which variable is likely to be easier to forecast.

b) Explain how your answer to part a) would change if these were residuals of an ARIMA model instead of “raw data of monthly sales”.

Question 3
The following ACF plots were produced for raw data of monthly sales of two different
variables, A and B.
a) Explain which variable is likely to be easier to forecast.
b) Explain how your answer to part a) would change if these were residuals of an
ARIMA model instead of "raw data of monthly sales".
Variable A:
0.15-
0.10 -
0.05 -
0.00
-0.05 -
-0.10 -
-0.15-7
5
10
15
Variable B:
1.00 -
0.75-
0.50 -
0.25 -
0.00
12
18
24
lag (1M]
20

Leveraging special tenchniques in analyzing historical data to predict future trends. Forecasting covers the methods and types of forecasting and their application to case studies.

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