Question
Which of the following methods is most suitable for
forecasting future sales based on historical sales data that exhibits seasonal trends ?Solution
Explanation: The ARIMA (AutoRegressive Integrated Moving Average) model is widely used for time series forecasting, especially when the data shows seasonal patterns or trends. ARIMA models combine three components: auto-regression (AR) , differencing (I) , and moving average (MA) . It is particularly effective for forecasting future values based on past data by capturing trends and seasonality. For datasets with clear seasonal fluctuations, a seasonal ARIMA (SARIMA) model can be used, which extends ARIMA by adding seasonal terms to capture seasonal patterns more explicitly. This makes ARIMA the most suitable method for sales forecasting when trends and seasonal variations exist. Option A: A Simple Moving Average smoothens data by averaging over a window but fails to capture seasonality and trends explicitly, making it less effective for forecasting complex seasonal data. Option B: Exponential Smoothing is useful for forecasting, especially when newer observations are more relevant, but it may not adequately model both seasonal patterns and trends as effectively as ARIMA. Option D: Linear Regression can be used for trend forecasting, but it does not handle seasonality in time series data well unless additional seasonal terms are added. Option E: Naive Bayes is a classification technique and not suitable for forecasting time series data with trends or seasonality.
The type of organizational structure that does not work in accordance with the principal of Unity of command?
Which organization has been designated as the Nodal Agency for issuing guarantee cover under the Credit Enhancement Guarantee Scheme for Scheduled Caste...
Consider the following statements regarding the use of bullion:
1) Bullion can be used for investment purposes as a hedge against inflation.
...What is the purpose of ethical standards?
What does the 'UCP 600' refer to in the context of documentary credit?
With full implementation of Basel III norms, the minimum Total Capital Ratio (including CCB) is prescribed by RBI as ________
For an enterprise with investment in plant and machinery or equipment of Rs.9 crore and turnover of Rs.40 crore will be classified as _______ , as per M...
Match the following:
Â
Which of the following features best describes a Term Loan as compared to a Cash Credit facility?
What is the role of the Insurance Ombudsman in India?