Second Degree Parabola Method :

y = na + bx + cx2 xy = ax + b x2 + cx3 x2 y = ax2 + bx3 + cx4

Equation : Y = a + bx + cx2

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Sum :
Fit the Second degree parabola to the following data. Estimate the population of 1981
Year Population (In Lakhs) 1974 6 1975 8 1976 10 1977 12.5 1978 15 1979 18 1980 21

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Year

Production Y

X X- 1977

x2

x3

x4

Xy

X2 y

1974 1975 1976

6 8 10

-3 -2 -1

9 4 1

-27 -8 -1

81 16 01

-18 -16 -10

54 32 10

1977
1978 1979

12.5
15 18

0
1 2

0
1 4

0
1 8

00
01 16

00
15 36

00
15 72

1980
N= 7

21
90.5

3
0

9
28

27
0

81
196

63
71

189
372

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Second Degree Parabola Method :

y = na + bx + cx2 _ _ _ _ _
90.5 = 7a + (0) b + 28c _ _ _ _ _
(1) (1) (2)

xy = ax + b x2 + cx3 _ _ _ _ _
71 = (0)a + 28b + (0)c _ _ _ _ _
(2)

x2 y = ax2 + bx3 + cx4 _ _ _ _ _

372 = 28a + (0) b + 196c _ _ _ _ _ Equation : Y = a + bx + cx2
(3)

(3)

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Finding the Value of b by Eq._ _ 2

xy = ax + b x2 + cx3 _ _ _ _ _
71 = (0)a + 28b + (0)c _ _ _ _ _
b=

(2) (2)

= 2.54

Now Finding the Value of a & c by comparing Eq._ _ 1 with Eq._ _ 3

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7a + (0) b + 28c = 90.5 _ _ _ _ _ 28a + (0) b + 196c = 372 _ _ _ _ _

(1) (3)

Multiplying Eq._ _ 1 with 4 & comparing with Eq._ _ 3

4 [7a + (0) b + 28c = 90.5 ] _ _ _ _ _
(1)

28a + 112c = 362 _ _ _ _ _

28a + 196c = 372 _ _ _ _ _ 28a + 196c = 372 _ _ _ _ _ 28a + 112c = 362 _ _ _ _ _

(1)
(3) (3)

C=
(1)

= 0.12

84c = 10 _ _ _ _ _

(1)

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7a + (0) b + 28c = 90.5 _ _ _ _ _ 28a + (0) b + 196c = 372 _ _ _ _ _

(1) (3)

Placing c = 0.12 in Eq._ _ 1 & finding the value of a

7a + 28(0.12) = 90.5 _ _ _ _ _ 7a + 3.36 = 90.5 _ _ _ _ _ 7a = 90.5 3.36 _ _ _ _ _ 7a = 87.14_ _ _ _ _
a=
.
(1) (1) (1) (1)

= 12.45

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Second Degree Parabola Method :

Placing a =12.45 ; b = 2.5 ; c = 0.12 in following equation

Equation : Y = a + bx + cx2 Equation : Y = 12.45 + 2.5 x + 0.12x2 Now Estimation for Year 1981
x =4 for Year 1981

Equation : Y = 12.45 + 2.5 (4) + 0.12(4)2 Equation : Y = 12.45 + 2.5 (4) + 0.12(4)2 Equation : Y = 12.45 + 10 + 1.92

Estimation for 1981 : Y = 24.37

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Exponential Smoothing :
Prepare 6 column Table

Write down the Year and given Value in first two column
Find smoothing value for column 3 by applying st = st-1 + ( xt st-1)
Where st = Year of smoothing st-1 = previous smoothing Value xt = Actual Value = State of Probability (given)
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Exponential Smoothing :
Find Change in smoothing value for column 4 by applying st = st-1 st Find Trend Estimate value for column 5 by applying Tt = [ st ] + ( 1 ) Tt-1
Where Tt = Year of smoothing = State of Probability (given) st = Change in Smoothing Tt-1 = previous Trend Estimate

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Exponential Smoothing :
Find Change in smoothing value for column 4 by applying st = st-1 st Find Forecast for column 6 by applying T xt = st + t-1
Where Tt = Year of smoothing = State of Probability (given) st = Change in Smoothing Tt-1 = previous Trend Estimate
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