Question

QUESTION 1 [30]
(1.1) Define the term “forecasting" and give two examples of its applications. (4)
(1.2) Give the difference between cross-sectional data and time series data, then give an example
of each case. (6)

Answer 1

1.1 ) Forecasting is a technique that uses historical data as inputs to make informed estimates that are predictive in determining the direction of future trend .

Example: 1) In businesses utilize forecasting to determine how to allocate their budgets or plan for anticipated expenses for an upcoming period of time .

2) Supply chain management - Forecasting can be used in supply chain management to ensure that the right product is at the right place at the right time.

1.2 )  Give the difference between cross-sectional data and time series data, then give an example
of each case :

# The difference between time series and cross sectional data is that the time series data focuses on the same variable over a period of time while the cross sectional data focuses on several variable at the same point of time

# Time series data is a set of observations collected at usually discrete and equally spaced time intervals and Cross sectional data are observations that come from different individuals or groups at a single point in time .