Forecasting techniques
Market research often ends up with a forecast: a forecast of future sales for instance. The preparation of such forecasts is known as time series analysis. The object here is often to separate the underlying trend within the forecast from whatever variations may be present.
First, though, what is a time series?
A time series
A time series consists of any set of observations, that are measured at specified time intervals (these intervals are usually equal).
Time series analysis (TSA) attempts to identify those factors that influence the observations in the series. Once these factors are identified, the time series may be extrapolated into the future and used for long-term and short-term planning. It is particularly useful in the forecasting of sales for a company. The aim is to separate variations from the underlying trend.
What are the variations that make the underlying trend hard to see?
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