... enter the workforce. Seasonal adjustment separates this reoccurring change from other trends.

The seasonal component of a time series is periodic. For the time series of computer shipments, a repeating three-month (quarterly) cycle dominates the seasonal component. Figure 27.3 zooms in on the seasonal component during 2010–2015. Shipments peak in the third month of each quarter. Evidently, companies ship goods at the end of the quarter to meet projections or obligations.

A timeplot shows seasonal component between 2010 and 2015. Between each year, the graph rises and falls four times, showing a quarterly cycle.

Figure 27.3 Seasonal component of computer shipments shows a strong three-month cycle.

Exponential Smoothing

Centered ...

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