Practice Exercise · Q12
Q.
Given below is the data of workers welfare expenses (in lakh ₹) in steel industries during 2001 - 2005. Use method of least squares to:
i) tabulate the trend values
ii) find the best fit for a straight-line trend
iii) compute expected sale trend for year 2006
| Year | 2001 | 2002 | 2003 | 2004 | 2005 |
|---|---|---|---|---|---|
| Welfare expenses (in lakh ₹) | 160 | 185 | 220 | 300 | 510 |
Andaman Nicobar CbseNCERTSubjective· 5mImportance★★★★★
90% · 36/40 Questions
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Start your 14-day free trial to unlock the full solution →With the origin shifted to the middle year 2003, the least-squares line is , giving trend values 112 → 438 lakh ₹ and a 2006 forecast of ₹519.5 lakh.
Straight-line trend by least squares: , with measured as deviation from the mid-year so that . Then
Steps
- Take (year ) so (odd number of years, ):
| Year | (lakh ₹) | |||
|---|---|---|---|---|
| 2001 | 160 | 4 | ||
| 2002 | 185 | 1 | ||
| 2003 | 220 | 0 | ||
| 2004 | 300 | 1 | ||
| 2005 | 510 | 4 | ||
| Σ | 1375 | 0 | 10 | 815 |
- Trend line:
- Trend (fitted) values:
| Year | ||
|---|---|---|
| 2001 | ||
| 2002 | ||
| 2003 | ||
| 2004 | ||
| 2005 |
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