Quantitative Analysis for Management, 13/e

5.2 Components of a Time-Series

A time series is sequence of values recorded at successive intervals of time. The intervals can be days, weeks, months, years, or other time units. Examples include weekly sales of HP personal computers, quarterly earnings reports of Microsoft Corporation, daily shipments of Eveready batteries, and annual U.S. consumer price indices. A time series may consist of four possible components—trend, seasonal, cyclical, and random.

The trend (T) component is the general upward or downward movement of the data over a relatively long period of time. For example, total sales for a company may be increasing consistently over time. The consumer price index, one measure of inflation, is increasing over time. While consistent ...