Time series is only useful in business
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Explanation:
What is the importance and usage of Time Series?
, A student
Time series is nothing but arrangement of statistical data in chronological order,that is,in accordance with the time.
A time series gives the relationship between two variables, one of them being time.
Mathematically, a time series is given by
Y = f(t)
where y is the phenomena at any given time t. Thus y can be regarded as a function of t.
Time series is constituted by following components :
Secular trend or long term movement
Periodic changes or short term movement
Irregular or random movement.
The major concern of time series analysis is to study the net effect of these components on the movement of the time series and also to study these components independently.
A time series carries profound importance in business and policy planning. It's uses are :
It is used to study the past behaviour of the phenomena under consideration.
It is used to compare the current trends with that in the past or the expected trends. Thus it gives a clear picture of growth or downfall.
It is used in business forecasting and policy planning by various organisations.
The cyclic variation help us understand the business cycles.
The seasonal variation are very useful for businesses and retailers as they earn more in certain seasons. For example, a seller of clothes will earn more profit if he sells swollen clothes in winter and silk clothes in summer.