What is an autoregressive forecasting model?
What will be an ideal response?
An autoregressive forecasting model incorporates correlations between consecutive values in a time series by using explanatory variables that are lagged values of the dependent variable. A first-order autocorrelation refers to the correlation among data values one period apart, a second-order autocorrelation refers to the correlation among data values two periods apart, and so on. Autoregressive models improve forecasting when autocorrelation is present in data. A first-order autoregressive model is:
Yi = a0 + a1Yi -1 + ?i
where Yi is the value of the time series in period i and ?i is a nonautocorrelated random error term having 0 mean and constant variance. A second-order autoregressive model is:
Yi = a0 + a1Yi -1 + a2Yi -2 + ?i
Additional terms may be added for higher-order models.
You might also like to view...
Each of the following is a relational algebra function except
a. join b. project c. link d. restrict
Identify a true statement about the obesity epidemic in the United States.
A. The harmful effects of the obesity epidemic are limited to specific individuals who became overweight as a result of poor dietary choices. B. It is near impossible to trace particular cases of obesity-related health harm to a particular food or drink. C. Cases of obesity are similar to standard cases of strict product liability. D. Businesses cannot claim that consumer decisions regarding use and misuse of their products play a deciding factor in obesity.
Process costing information can inform managers about the amounts and types of products ordered by specific customers
Indicate whether the statement is true or false
Which of the following statements about the competitive-parity method of budgeting is true?
A) It is the most commonly used bottom-up method for budgeting. B) It works because it relies on dynamic market shares that change annually. C) It is the only top-down budgeting method used to determine promotional budgets. D) It is considered the most logical budgeting method. E) It mirrors the best thinking of others in the business.