Lahore School of Economics

BSc IV
Time Series Analysis and Forecasting Winter-2016

Name:_____________________ Section:_______________

Date:______________________ Score:________________

Computer application using MINITAB

Important instruction: Write down all the commands of MINITAB used to compute the answers
(e.g., Stat -> Time Series -> Time Series Plot).

Q.1:John Mosby, owner of several Mr. Tux rental stores, is beginning to forecast his most
important business variable, monthly dollar sales. One of his employees, Virginia Perot,
gathered the sales data. John decides to use all 96 months of data he has collected. The data is
stored in the file sales.xls
a. Use MINITAB to plot the data as a time series.
b. Do you think that the series is stationary or not? If not, identify the components.
c. Compute the autocorrelations for time lags 1 and 2. Test to determine whether these
autocorrelation coefficients are significantly different from zero at the 0.05 level of
significance.
d. Compute the autocorrelation confidents for twenty four time lags. Is this time series
stationary?
e. Compute the first differences of the data.
f. Compute the autocorrelations for time lags 1 and 2 using the differenced data.
g. Use MINITAB to plot the differenced data and compute the autocorrelation coefficients
for the differenced data for first six time lags.
h. Is this time series stationary? If not which component is present.
Q.2: An analyst would like to determine whether there is a pattern to earnings per share for the
Price Company, which operates a wholesale/retail cash-and-carry business in several states
under the name Price Club. The data are shown in the following table.

Quarterly Earnings per Share for the Price Company: 1986-1993

Calendar 1st 2nd 3rd 4th

1986 .40 .29 .24 .32
1987 .47 .34 .30 .39
1988 .63 .43 .38 .49
1989 .76 .51 .42 .61
1990 .86 .51 .47 .63
1991 .94 .56 .50 .65
1992 .95 .42 .57 .60
1993 .93 .38 .37 .57

a. Use MINITAB to plot the data as a time series.

b. Do you think that the series is stationary or not?
c. Plot linear, quadratic and exponential trend to the following data set. Write the best
model in terms of the accuracy measures.
d. Compute the autocorrelations for time lags 1 and 2. Test to determine whether these
autocorrelation coefficients are significantly different from zero at the 0.05 level of
significance.
e. Compute the autocorrelation confidents for the first six time lags. Is this time series
stationary?
f. Compute the first differences of the data.
g. Compute the autocorrelations for time lags 1 and 2 using the differenced data.
h. Use MINITAB to plot the differenced data and compute the autocorrelation coefficients
for the differenced data for first six time lags. Is this time series stationary?