Trend Projection Essay

Pattern projection method is actually a classical method of business forecasting. This process is essentially worried about the study of movement of changing through time. The use of this approach requires a long and trusted time series data. The trend projection method can be used under the assumption that the elements responsible for yesteryear trends in variables being projected (e. g. product sales and demand) will carry on and play their very own part in future in the same manner and to the same extend as they do in the past in determining the magnitude and direction in the variable.

You will discover three (3) techniques of trend projection based on time – series data.

1 . Graphic Method:  - under this approach, annual product sales data is usually plotted on a graph newspaper and a line is definitely drawn through the plotted details. Then a cost-free hand series is so sketched that the total distance between your line as well as the point is minimum. Although this method is very easy and least costly, the projections made through this method are generally not very reliable. The reason is that the extension of the trend range involves subjectivity and personal bias of the research.

Sale

Years /Trend Output

2 . Fitting Tendency Equation:  Least square approach: - Installing trend equation is a formal technique of projecting fashionable in demand. Underneath this method, a trend collection (or curve) is suited to the time – series info with the aid of record techniques. The proper execution of the craze equation that may be fitted to time series info is determined either by plotting the sales data or perhaps by striving different types of trend equations for the very best fit. 5. When plotted, a time series date may show numerous trends. The most frequent types of trend equation are 1) liner and

2) rapid trends

* Thready Trend: - When a time series info reveals a rising pattern in product sales than a straight-line trend equation of the pursuing form is usually fitted. (S = A + BT; Where H = gross annual sales, T = Period (in year), A & B will be constant. The parameter n given the...



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