The four components of time series data are: trend variations, cyclical variations, seasonal variations, and random variations. Briefly describe each type of variation
a . Trend variations: Trend variations can either be increasing or decreasing demand movements over a number of years. These variations can be due to factors such as population growth, population shifts, cultural change, and income shifts.
b. Cyclical variations: This type of variation is typified by wave-like movements where demand fluctuates up-and-down. These fluctuations must be sustained for leased one year. Variation is usually influenced by macroeconomic and/or political factors.
c. Seasonal variations: variation is seasonal; demand becomes somewhat predictable on certain days, weeks, months, years, or seasons. In the United States the most common form of seasonal variation is seen in many retail industries during the Christmas season when demand usually spikes.
d. Random variations: Unexpected or unpredictable events such as natural disasters, strikes, and wars will cause random variations in demand. The threat of hurricane will usually cause a tremendous spike in demand for items like batteries, bottled water, and wood products.
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