Time Series Analysis 7 / 10

Advantages & Disadvantages

Advantages of Time Series Analysis
  • it is useful when forecasting data which has a regular seasonal pattern as may be the case with sales of certain products

  • it is a rather simplistic approach

Disadvantages of Time Series Analysis
  • it assumes that past trends will continue indefinitely and that extrapolating data based on historic information will give valid conclusions.

  • In reality, the sales of products may be influenced by the actions of competitors, particularly in relation to new products becoming available on the market.

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