and others. Therefore time series helps us to study and analyze the time related data which involves in business fields, economics, industries, etc… Components of Time Series There are four types of components in a time series. They are as follows; (i) Secular Trend (ii) Seasonal variations (iii) Cyclic variations (iv) Irregular variations (i) Secular Trend It is a general tendency of time series to increase or decrease or stagnates during a long period of time. An upward tendency is usually observed in population of a country, production, sales, prices in industries, income of individuals etc., A downward tendency is observed in deaths, epidemics, prices of electronic gadgets, water sources, mortality rate etc….
It is not necessarily that the increase or decrease should be in the same direction throughout the given period of time. (ii) Seasonal Variations As the name suggests, tendency movements are due to nature which repeat themselves periodically in every seasons. These variations repeat themselves in less than one year time. It is measured in an interval of time.
Seasonal variations may be influenced by natural force, social customs and traditions. These variations are the results of such factors which uniformly and regularly rise and fall XII Std - Business Maths & Stat EM Chapter - - in the magnitude. For example, selling of umbrellas’ and raincoat in the rainy season, sales of cool drinks in summer season, crackers in Deepawali season, purchase of dresses in a festival season, sugarcane in Pongal season. (iii) Cyclic Variations These variations are not necessarily uniformly periodic in nature.
That is, they may or may not follow exactly similar patterns after equal intervals of time. Generally one cyclic period ranges from to years and there is no hard and fast rule in the fixation of years for a cyclic period. For example, every business cycle has a Start- Boom- Depression- Recover, maintenance during booms and depressions, changes in government monetary policies, changes in interest rates. (iv) Irregular Variations These variations do not have particular pattern and there is no regular period of time of their occurrences.