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Consider a company that its Sales has a rising trend. The yearly time series data over the last 36 years will be used to forecast

Consider a company that its Sales has a rising trend. The yearly time series data over the last 36 years will be used to forecast the future values. No explanatory variables are used here.

a. Based on the available information, is the Sales data stationary here? Explain your answer.

b. If not stationary, what transformation should we use to make the data stationary?

c. Assuming a transformation for stationarity, write the SAS code to transform and run ARIMA of your choice.

d. If the autocorrelations of the Sales changes, namely, Salest - Salest-1 are as follows:

Lag

Correlation

1

0.15

2

0.09

3

-0.21

4

0.04

5

0.31

6

-0.28

7

0.08

8

0.30

9

0.26

10

-0.29

Test with a 95% confidence interval if these individual autocorrelations represent white noise.

e. Run an overall test to verify if the Sales changes are white noise.

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