Strategic Management
What is the Trend? (B)
What is the trend and how it is used in economy? What are the business purposes of time series analysis?
Posted: Mar 2012
The trend is the term that describes the appearance of certain events in specific period of time. The trend analysis is used in economy and society for analysis of past events and forecasting the future events. The trend represents the record of certain parameter in specific period of time and gives estimation of expected behavior in the future.
The trend analysis is the statistical-mathematical method of dynamic analysis of mass events. It represents the complex method of time series analysis. Economists take the trend as a long term component in analysis, forecasting and planning.
Statistical theory and dynamical analysis of mass events takes trend as characteristic function of certain event in time.
This function represents the series of points that certain behavior was passing through. Trend is the dynamical average value of certain event.
This statistical method is used for risk assessment, trend analysis, and analysis of factors that influence the trend. Forecasting is the estimation of future flows of events that has a purpose of defining planning of future activities.
The trend analysis is frequently used statistic method economical time series analysis, which is used for quantitative measuring of economic factors. This provides the estimation of future economic parameters and analysis of effects of certain economic and business decisions.
The range and number of data selected depends of demand for calculation accuracy. The choice of trend function depends of the analyzed event ( e.g. linear or curve ).
