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Although there are many questions that can be asked, these four are important
and will allow us to investigate numerous analytical tools in Data Analysis .Asa
note of caution, let us keep in mind that this example is based on a very small
amount of data; thus, we must be careful to not overextend our perceived insight.
The greater the amount of data, the more secure one can be in his observations. Let
us begin by addressing the first question.
3.5.1 Graphical Analysis
Our graphical analysis of the sales data has already revealed the possibility of sys-
tematic behavior in the series; that is, there is an underlying system that influences
the behavior of the data. As we noted earlier, all series, except for product D, display
some form of cyclical behavior. How might we determine if systematic behavior
exists? Let us select product E for further analysis, although we could have chosen
any of the products.
In Exhibit 3.18 we see that the product time series does in fact display repeti-
tive behavior; in fact, it is quite evident. Since we are interested in the behavior of
both the yearly demand and quarterly demand, we need to rearrange our time series
data to permit a different type of graphical analysis. Table 3.3 shows the data from
Table 3.1 in a modified format: each row represents a year (1–6) and each column
a quarter (1–4); thus, the value 101 represents quarter 3 in year 5. Additionally,
the right most vertical column of the table represents yearly totals. This new data
configuration will allow us to perform some interesting graphical analysis.
Exhibit 3.18 Product E time series data
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