Case study assignment question 2

Case Study

The president of a small manufacturing firm is concerned about the continual increase in manufacturing costs over the past several years. The following figures provide a time series of the cost per unit for the firm’s leading product over the past eight years.

 Year Cost/Unit (\$) 1 2003 20 2 2004 24,5 3 2005 28,2 4 2006 27,5 5 2007 26,6 6 2008 30 7 2009 31 8 2010 36

Show a graph of this time series.

Find all simple index numbers for the base year 2003 and 2008.

Determine all chain base index numbers.

What is average growth rate of the cost in the years 2006-2010?

Develop the equation for the linear trend of the time series. What is the average cost increase that the firm has been realizing per year?

What cost can we predict for the year 2014 ? What is the error of this estimate?

Make a comprehensive analysis of time series below:

( ice-cream sales (tonnes) )

 March April May June 9,1 10,6 11,5 13,8

Using the least square criterion estimate the parameters of the proper trend function. What kind of ice-cream sales can we expect in July? Give the standard error of estimate. What kind of assumption must we use for a given estimation? Check the average growth rate of the variable between February and June if .

Case Study

Gasoline sales time series:

 Week Sales (1000s of gallons) 1 17 2 21 3 19 4 23 5 18 6 16 7 20 8 18 9 22 10 20 11 15 12 22

Make a comprehensive analysis of time series.

Choose the first, the fifth and last week as the base period.

The values of Alabama building contracts (in millions of dollars) for a 12month period (the year 2012) are as follow:

 Month Sales Month Sales 1 240 7 220 2 350 8 310 3 230 9 240 4 260 10 310 5 280 11 240 6 320 12 230

Compare values of the variable using to this aim the first period as a base.

Check the changes using the chain base index numbers.

Determine the average growth rate between March and July.

Case Study

The president of small manufacturing firm is concerned about the continual increase in manufacturing costs over the past several years. The following figures provide a time series of the cost per unit for the firm’s leading product over the past eight years.

 year Cost/unit (\$) year Cost/unit (\$) 2005 20,00 2009 26,60 2006 24,50 2010 30,00 2007 28,20 2011 31,00 2008 27,50 2012 36,00

Compare the cost in the year 2012 with the cost in the year 2010.

Compare the cost in the year 2011 with the cost in the year 2007.

Compare the cost in the year 2005 with the cost in the year 2010.

Determine all costs with the base unit cost 36,00(\$).

What is the average cost increase that the firm has been realizing per year?

Develop the equation for the linear trend components of the time series.

The following data show the percentage of rural, urban, and suburban Americans who have a high-speed Internet connection at home (Pew Internet Rural Broadband Internet Use, February 2006).

 Year Rural Urban Suburban 2001 3 9 9 2002 6 18 17 2003 9 21 23 2004 16 29 29 2005 24 38 40

For each group, develop a linear trend equation.

For each group check the average growth /decline/ rate.

For each group make a prediction for the year 2006 and determine standard error of estimate.

Case Study

The following data show the average monthly cellular telephone bill (The

New York Times, Atlanta, 2006)

 year 1999 2000 2001 2002 2003 Amount (\$) 41 45 47 48 50

Graph the time series.

Does the trend appear to be present?

Find the theoretical linear trend function.

Use the trend equation to estimate the average monthly bill for the year 2005 and 2007. Use standard error in your estimation.

Based on data below make a comprehensive analysis of price dynamics, quantity and value of all grocery products per capita in Poland in 2011 relative to the base year 2010.

 product unit price (PLN) quantity 2010 2011 2010 2011 eggs carton 5,5 6,0 60 50 butter 250 grams 3,9 3,9 70 65 meat /pork/ kilogram 17 19 30 35 milk litre 1,8 2,3 120 140 bread loaf 2,2 2,0 150 150

Do not forget to make conclusions taking into account Fisher ideal index.

Case Study

Fresh fruit price and quantity data for the year 1988 and 2001 follow (Statistical Abstract of the United States, 2002).

Quantity data reflect per capita consumption in pounds and prices are per pound.

 Fruit 1988 Per Capita Consumption (pounds) 1988 Price (\$/pound) 2001 Price (\$/pound) bananas 24,3 0,41 0,51 apples 19,9 0,71 0,87 oranges 13,9 0,56 0,71 pears 3,2 0,64 0,98

Compute relative price for each product.

Compute a weighted aggregate price index for fruit products.

Comment on the change in fruit prices over the 13-year period.

Case Study

Starting faculty salaries (nine-month basis) for assistant professor of business administration at a major Midwestern university follow.

Comment on the trend in salaries in higher education as indicated by these data. What faculty salary can we expect in the year 2015 ?

Make a comprehensive analysis of dynamic.

 year Starting Salary (\$) 1970 14 000 1975 17 500 1980 23 000 1985 37 000 1990 53 000 1995 65 000 2000 80 000 2005 110 000

Case Study

Boran Stockbrokers, Inc., selects four stocks for the purpose of developing its own index of stock market behavior. Prices per share for a 2004 base period, January 2006, and March 2006 follow.

Base-year quantities are set on the basis of historical volumes for stocks.

 Price per Share Stock Industry 2004 Quantity 2004 base January 2006 March 2006 A Oil 100 31,50 22,75 22,50 B Computer 150 65,00 49,00 47,50 C Steel 75 40,00 32,00 29,50 D Real Estate 50 18,00 6,50 3,75

Use the 2004 base period to compute the Boran index for January and March 2006. Compute the price relatives for the four stocks.

/Use the weighted aggregates of price to compute the January 2006 and March 2006 Boran indexes/

Comment on what the indexes tell us about what is happening in the stock market.

Case Study

The following table reports prices and usage quantities for two items in 2004 and 2006.

 Item Quantity Unit price (\$) 2004 2006 2004 2006 A 1 500 1800 7,5 7,75 B 2 1 630 1 500

Find price change for each item in 2006 using 2004 as the base period.

Find unweighted aggregate price index for the two items using the year 2004 as the base year.

Find weighted aggregate price index for the two items using Lasperyes and Paasche index.

Check the changes of quantities using appropriate aggregate index number.

Interpret Fisher ideal index.

What can you say about value change?

Case Study

A large manufacturer purchases an identical component from three independent suppliers that differ in unit price and quantity supplied. The relevant data for 2004 and 2006 are given here:

 supplier Unit price (\$) Quantity (2004) 2004 2006 A 5,45 6,0 150 B 5,6 5,95 200 C 5,5 6,2 120

Compute the price relatives for each of the component suppliers separately. Find all possible unweighted and weighted index numbers. What is the interpretation of these index numbers?