5. Based on the plot, which of the following are true? (Check any as appropriate

Question

5. Based on the plot, which of the following are true? (Check any as appropriate.)

a. The orders exhibit seasonality.

b. The orders exhibit trend.

c. The orders exhibit a random component.

d. Exponential smoothing is appropriate.

e. Regression without seasonality is appropriate.

f. A classical decomposition is appropriate.

Month Orders 1 78 2 87 3 92 4 88 5 81 6 81 7 86 8 94 9 97 10 117 11 108 12 114 13 84 14 91 15 101 16 97 17 89 18 86 19 89 20 98 21 96 22 125 23 113 24 121 25 91 26 93 27 105 28 99 29 98 30 96 31 101 32 103 33 108 34 129 35 119 36 125 37 87 38 89 39 96 40 98 41 89 42 92 43 96 44 95 45 103 46 126 47 117 48 119 Orders by Month 140 120 100 / 80 2 60 O 40 20 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 Month

Explanation / Answer

5. Based on the plot, which of the following are true? (Check any as appropriate.)

Answer to the question is as follows:

a. The orders exhibit seasonality. - true, the troughs and peaks are consistently coming in a seasonal pattern

b. The orders exhibit trend - true, the orders by month are trending upwards

c. The orders exhibit a random component - yes, there is not noise in the data

d. Exponential smoothing is appropriate. - true, try holt-winters seasonality

e. Regression without seasonality is appropriate. - false, we need to take into account seasonality as it is present in the graph

f. A classical decomposition is appropriate. - correct, this would still decompose the trend into random noise+seasonal component+trend component

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