Business Forecasting 8th Edition John Hanke, Dean Wichern - Solutions

Value Line estimates of sales and earnings growth for individual companies are derived by correlating sales, earnings, and dividends to appropriate components of the National Income Accounts such as capital spending. Jason Black, an analyst for Value Line, is examining the trend of the capital
What are some basic forces that affect the seasonal component of most variables?
What kind of trend model should be used in each of the following cases?a. The variable is increasing by a constant rate.b. The variable is increasing by a constant rate until it reaches saturation and levels out.c. The variable is increasing by a constant amount.
What are some basic forces that affect the trend-cycle of most variables?
Explain when a multiplicative decomposition may be more appropriate than an additive decomposition.
Explain the concept of decomposing a time series.
Downtown Radiology's accountant projected that revenue would be considerably higher. Since ownership interest will be made avail- able in some type of public offering. Downtown Radiology's management must make a decision concerning the accuracy of Professional Mar- keting Associates' projections.
Which data set and forecasting model should Julie use to forecast sales for 1996?
Do any of the forecasting models studied in this chapter work with the actual Murphy Brothers' sales data?
Do any of the forecasting models studied in this chapter work with the national sales data?
Determine the adequacy of the forecasting model you have chosen.
Choose the best model and forecast new clients for the rest of 1993.
Using either Minitab or CB Predictor (see “Excel Applications: CB Predictor”at the end of this chapter), use Winters’ multiplicative smoothing method withsmoothing constants a = B = y = .5 to generate a forecast for January 2003.Save the residuals.
Evaluate these forecasting methods using the forecast error summary measures presented in Chapter
Develop an exponential smoothing procedure to forecast the number of new clients seen by CCC for the rest of 1993.
Develop a moving average model to forecast the number of new clients seen by CCC for the rest of 1993.
Develop a naive model to forecast the number of new clients seen by CCC for the rest of 1993.
What should John do in order to determine the adequacy of the Winters' forecasting technique?
Do you agree with John regarding his disap- pointment in his results?
What is the implication of the negative sign on MPE?
What is the ideal value for MPE when using any exponential smoothing method?
Summarize the forecast error level for the best method John has found using Minitab.
Forecast sales for 2003.
Identify the model Bob and Mary should use as the basis for their business planning in 2003. and discuss why you selected this model.
A job shop manufacturer that specializes in replacement parts has no forecasting system in place, and manufactures products based on last month's sales. Twenty- four months of sales data are available and are given in Table P-16.a. Plot the sales data as a time series. Are the data seasonal? Hint:
The Consolidated Edison Company sells electricity (82% of revenues), gas (13%). and steam (5%) in New York City and Westchester County. Bart Thomas, company forecaster, is assigned the task of forecasting the company's quarterly revenues for the rest of 2002 and all of 2003. He collects the data
The Triton Energy Corporation explores for and produces oil and gas. Com- pany president Gail Freeman wants to have her company's analyst forecast the company's sales per share for 2000. This will be an important forecast because Triton's restructuring plans have hit a snag. The data are presented
Southdown, Inc., one of the nation's largest cement producers, is pushing ahead with a waste fuel burning program. The cost for Southdown will total about $37 million. For this reason, it is extremely important for the company to have an accurate forecast of revenues for the first quarter of 2000.
General American Investors Co., a closed-end regulated investment management company, invests primarily in medium- and high-quality stocks. Jim Campbell is studying the asset value per share for this company and would like to forecast this variable for the remaining quarters of 1996. The data are
The Hughes Supply Company uses an inventory management method to determine the monthly demands for various products. The demand values for the last 12 months of each product have been recorded and are available for future forecasting. The demand values for the 12 months of 2002 for one electrical
This question refers to Problem 9. Use exponential smoothing with a smoothing constant of 2 and an initial value of 9.29 to forecast the yield for January 2003. Is this forecast better than the forecast made using the best moving average model? Explain
The yield on a general obligation bond for the city of Davenport fluctuates with the market. The monthly quotations for 2002 are given in Table P-9:a. Find the forecast value of the yield on the obligation bonds for each month. starting with April, by using a three-month moving average.b. Find the
Given the series Y, in Table P-8:a. What is the forecast for period 9 using a five-period moving average?b. If simple exponential smoothing with a smoothing constant of .4 is used. what is the forecast for period 4?c. In partb, what is the forecast error for time period 3?
Refer to Problem 6. Use a three-month moving average to forecast the mutual fund price for January 2004. Is this forecast better than the forecast made using the naive model? Explain.
Apex Mutual Fund invests primarily in technology stocks. The prices of the fund at the end of each month for the 12 months of 2003 are given in Table P-6:a. Find the forecast value of the mutual fund for each month by using a naive model. The value for December 2002 was 19.00.
Which forecasting techniques should be tried if the data are seasonal?
Which forecasting technique(s) should be tried if the data are trending?
Which forecasting technique assigns equal weights to each observation?
Which forecasting technique uses the value for the current period as the forecast for the next period?
Which forecasting technique continually revises an estimate in the light of more recent experiences?
What did Julie conclude about the data pattern of Alomega Sales?
What type of forecasting technique did Dorothy recommend for this data set?
What did she conclude after she completed this analysis?
Explain how Dorothy used autocorrelation analysis to explore the data pattern for the number of new clients seen by CCC.
Suppose that autocorrelations 2 and 36 are significant. Would you conclude that the seasonality has a trend? If so, explain what is meant by a trend in the seasonality.
How would you explain the line "Random 49%."
Describe the trend and seasonal effects that appear to be present in the sales data for Mr. Tux.
Summarize the results of John's analysis in one paragraph that a manager, not a forecaster, can understand.
Which data should Julie use to develop a fore- casting model?
How does the pattern of the actual sales data compare to the pattern of the retail sales data presented in Case 3-1A?
What should Julie conclude about this Murphy Brothers' sales data?
How will Julie know which technique works best?
What forecasting techniques should Julie try?
Has Julie made good progress toward finding a forecasting technique?
What should Julie conclude about the retail sales series?
This question refers to Problem 21.a. Fit the random model given by Equation 3.4 to the data in Table P-21 by estimating with the sample mean Y so Y, Y. Compute the residualse, Y,-, Y-Y.b. Using Minitab or a similar program, compute the autocorrelations of the residuals for the first 10 time lags.
Table P-21 contains the weekly sales of a food item for 52 consecutive weeks.a. Use a computer to plot the sales data as a time series.b. Do you think this series is stationary or nonstationary?c. Using Minitab or a similar program, compute the autocorrelations of the sales series for the first 10
An analyst would like to determine whether there is a pattern to earnings per share for the Price Company, which operates a wholesale/retail cash-and-carry business in several states under the name Price Club. The data are shown in Table P-20. Describe any patterns that exist in these data.
Analyze the autocorrelation coefficients for the series shown in Figures 3-18 through 3-21. Briefly describe each series.
This question refers to Problem 17. Compute the first differences of the quarterly loan data for Dominion Bank..a. Compute the autocorrelation coefficient for time lag 1 using the differenced data.b. Use a computer program to plot the differenced data and compute the auto- correlations for the
Allie White, the chief loan officer for Dominion Bank, would like to analyze the bank's loan portfolio for the years 1998 to 2003. The data are shown in Table P-17.a. Compute the autocorrelations for time lags 1 and 2. Test to determine whether these autocorrelation coefficients are significantly
Which of the following statements is true concerning the accuracy measures used to evaluate forecasts?a. The MAPE takes into consideration the magnitude of the values being forecast.b. The MSE penalizes large errors.c. The MPE is used to determine whether a model is systematically predicting too
Which measure of forecast accuracy should be used in each of the following situations?a. The analyst needs to determine whether a forecasting method is biased.b. The analyst feels that the size, or magnitude, of the forecast variable is important in evaluating the accuracy of the forecast.c. The
Compute the 95% confidence interval for the autocorrelation coefficient for time lag 1 for a series that contains 80 terms.
The number of marriages in the United States is given in Table P-13. Compute the first differences for these data. Plot the original data and the difference data as a time series. Is there a trend in either of these series? Discuss.
List some of the forecasting techniques that should be considered when forecasting a cyclical series. Give examples of situations in which these techniques would be applicable.
List some of the forecasting techniques that should be considered when forecasting a seasonal series. Give examples of situations in which these techniques would be applicable.
List some of the forecasting techniques that should be considered when forecasting a trending series. Give examples of situations in which these techniques would be applicable.
List some of the forecasting techniques that should be considered when forecasting a stationary series. Give examples of situations in which these techniques would be applicable.
Descriptions are provided for several types of series: random, stationary, with a trend, or seasonal. Identify each type of series.a. A series having basic statistical properties, such as the mean and variance, that remain constant over time.b. The successive values of a time series are not related
Each of the following statements describes either a stationary or nonstationary series. Indicate which.a. A series that has a trend.b. A series whose mean and variance remain constant over time.c. A series whose mean value is changing over time.d. A series that contains no growth or decline.
Describe how correlograms are used to analyze autocorrelations for various lags of a time series.
What does an autocorrelation coefficient measure?
What is autocorrelation?
Describe each of the components in a time series.
What is a time series?
Explain the differences between qualitative forecasting techniques and quantita- tive techniques.
Define the residuals (errors) to be the differ- ences between the actual sales values and the values predicted by the straight line. How might you examine the residuals to decide if Julie's straight-line representation is adequate?
What do you think of Julie Ruth's analysis?
Suppose John decides to draw a straight line through his scatter diagram freehand so that it fits well and then extends this line into the future, using points along the line as his monthly forecasts. How accurate do you think these forecasts will be? Use the standard deviation values John
What forecasting ideas come to mind when you study John's mean monthly sales values for the years of his data?
Abbott & Sons needs to forecast the mean age of its hourly workforce. A random sample of personnel files is pulled and give the results below. Prepare both a point estimate and a 98% confidence interval for the mean age of the entire workforce. Test the hypothesis Ho: p = 44 versus H: 44 at the 2%
A real estate investor collects the following data on a random sample of apartments on the west side of College Station. Texas.
Consider the population of 200 weekly observations that are presented in Table P- 13. The independent variable X is the average weekly temperature of Spokane. Washington. The dependent variable Y is the number of shares of Sunshine Mining Stock traded on the Spokane exchange in a week. Randomly
Anna Sheehan is the manager of the Spendwise supermarket chain. She would like to be able to predict paperback book sales (books per week) based on the amount of shelf display space (feet) provided. Anna gathers data for a sample of 11 weeks as shown in Table P-12.a. Plot a scatter diagram.b. What
James Dobbins, maintenance supervisor for the Atlanta Transit Authority, would like to determine whether there is a positive relationship between the annual maintenance cost of a bus and its age. If a relationship exists. James feels that he can do a better job of predicting the annual bus
Population experts indicate that family size has decreased in the last few years. Ten years ago the average family size was 2.9. Consider the population of 200 family sizes given in Table P-10. Randomly select a sample of 30 family sizes and test the hypothesis that the average family size has not
Based on past experience, the California Power Company forecasts that the mean residential electricity usage per household will be 700 kwh next January. In January the company selects a simple random sample of 50 households and computes a mean and standard deviation of 715 and 50, respectively.
The manager of a frozen yogurt store claims that a medium-size serving contains an average of more than 4 ounces of yogurt. From a random sample of 14 servings. she obtains a mean of 4.31 ounces and a standard deviation of 52 ounce. Test. with a .05, the manager's claim. Find the p-value for the
Over a period of years, a toothpaste has received a mean rating of 5.9. on a 7- point scale, for overall customer satisfaction with the product. Because of a minor unadvertised change in the product, there is concern that the customer satisfaction may have changed. Suppose the satisfaction ratings
New Horizons Airlines wants to forecast the mean number of unoccupied seats per flight to Germany next year. To develop this forecast, the records of 49 flights are randomly selected from the files for the past year, and the number of unoccupied seats is noted for each flight. The sample mean and
We want to forecast whether the mean number of absent days per year has increased for our large workforce. A year ago the mean was known to be 12.1. A recent sample of 100 employees reveals a sample mean of 13.5 with a sample standard deviation of 1.7 days. Test at the .05 significance level to
From data on a large sample of sales transactions, a small business owner reports that a 95% confidence interval for the mean profit per transaction. p. is (23.41. 102.59). Use these data to determinea. A point estimate (best guess) of the mean u and its 95% error margin.b. A 90% confidence
A large construction company was trying to establish a useful way to view typical profits from jobs obtained from competitive bidding. Because the jobs vary substantially in size and the final amount of the successful bid, the company decided to express profits as percent earnings:
Sandy James thinks that housing prices have stabilized in the past few months. To persuade her boss, she intends to compare current prices with last year's prices. She collects 12 housing prices from the want ads and calculates the mean and standard deviation of the prices she has found. What are
Dick Hoover, owner of Modern Office Equipment, is concerned about freight costs and clerical costs incurred on small orders. In an effort to reduce expenditures in this area, he has decided to introduce a discount policy rewarding orders over $40 in the hope that this will cause customers to
Is a feedback process available to evaluate the forecast after it is made and to adjust the forecasting process accordingly?
Does the forecaster clearly understand how the forecast will be used in the organization?
Will the forecast be made in time to help the decision-making process?
How accurate can we expect the forecast to be?

Showing 200 - 300 of 1262

Business Forecasting 8th Edition John Hanke, Dean Wichern - Solutions

Step by Step Answers