10. Which statement is correct about forecasting? 1. There are only two basic pa

Question

10. Which statement is correct about forecasting? 1. There are only two basic patterns of a demand time series: horizontal and trend. 2. There are only three basic patterns of a demand time series: horizontal, trend and 3. There are only four basic patterns of a demand time series: horizontal, trend, seasonal and 4. There are only five basic patterns of a demand time series: horizontal, trend, seasonal, 5. There are only six basic patterns of a demand time series: horizontal, trend, seasonal seasonal. cyclical cyclical and random. cyclical, random and vertical.

Explanation / Answer

Correct statement is 3

There are typically four general types of patterns in time series. They are 1. horizontal

2. Trend

3. Seasonal

4. Cyclical

Trend component:- the trend is a long term component that represents the growth or decline in the time series over an extended period of time. Trend can be linear or non-linear.

cyclical component:- The cyclical component is the wave like fluctuations around the trend.

Seasonal component:- It is a pattern that repeat itself year after year

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