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Chapter 11

Establishing the trend, T

2.1 linear regression

 Only valid if we assume a linear trend

2.2 Moving averages

 Useful when we cannot assume a linear trend

Example

The following table gives the takings ($000) of a shopkeeper in each quarter
of four successive years

Qtrs 1 2 3 4

20X1 13 22 58 23
20X2 16 28 61 25
20X3 17 29 61 26
20X4 18 30 65 29
The sales show the following pattern:

Sales

Time

There is a clear seasonal element and an upward underlying trend.

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