Question

Applicability areas of time series in the contemporary business world and in each case cite a relevant example.

Answer 1

The usage of time series models is twofold:

• Obtain an understanding of the underlying forces and structure that produced the observed data
• Fit a model and proceed to forecasting, monitoring or even feedback and feedforward control.

Hence the tools and theory of time series can be applied to any data with time as an input. Hence its a sequential data { X(t) }. X(t) can be real number or even a vector.

There are many sectors of business world where this can be applied.

• Economic Forecasting: To forecast, say, supply or demand of a commodity so as to make business decisions according to it
• Sales Forecasting: To forecast expected sales so as to know how much investment a business would need beforehand.
• Stock Market Analysis : to forecast the price movements in a stock price index
• Census Analysis : regarding population growth