Page 281 - F2 - MA Integrated Workbook STUDENT 2018-19

Statistical techniques

5.7 Limitations of time series analysis

 There is an assumption that what has happened in the past is a
reliable guide to the future.

 There is an assumption that a straight-line trend exists.

 There is an assumption that seasonal variations are constant,
either in actual values using the additive model (such as dollars of
sales) or as a proportion of the trend line value using the
multiplicative model.

Illustrations and further practice

Now try TYU questions 6 and 7 from Chapter 12.

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