Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Ashland MultiComm Services (AMS) marketing department wants to increase subscriptions for its 3-For-All telephone, cable, and Internet combined service. To ensure that as many

The Ashland MultiComm Services (AMS) marketing department wants to increase subscriptions for its 3-For-All telephone, cable, and Internet combined service. To ensure that as many trial subscriptions to the 3-For-All service as possible are converted to regular subscriptions, the marketing department works closely with the customer support department to accomplish a smooth initial process for the trial subscription customers. To assist in this effort, the marketing department needs to accurately forecast the monthly total of new regular subscriptions.

A team consisting of managers from the marketing and customer support departments was convened to develop a better method of forecasting new subscriptions. Previously, after examining new subscription data for the prior three months, a group of three managers would develop a subjective forecast of the number of new subscriptions.

Livia Salvador, who was recently hired by the company to provide expertise in quantitative forecasting methods, suggested that the department look for factors that might help in predicting new subscriptions.

Members of the team found that the forecasts in the past year had been particularly inaccurate because in some months, much more time was spent on telemarketing than in other months. Livia collected data (stored in AMS13) for the number of new subscriptions and hours spent on telemarketing for each month for the past two years.

AMS13

Required:

1. What criticism can you make concerning the method of forecasting that involved taking the new subscriptions data for the prior three months as the basis for future projections?

2. What factors other than number of telemarketing hours spent might be useful in predicting the number of new subscriptions? Explain.

3. a. Analyze the data and develop a regression model to predict the number of new subscriptions for a month, based on the number of hours spent on telemarketing for new subscriptions.

b. If you expect to spend 1,200 hours on telemarketing per month, estimate the number of new subscriptions for the month. Indicate the assumptions on which this prediction is based. Do you think these assumptions are valid? Explain.

c. What would be the danger of predicting the number of new subscriptions for a month in which 2,000 hours were spent on telemarketing?

Step by Step Solution

3.48 Rating (164 Votes )

There are 3 Steps involved in it

Step: 1

1 Taking the past three months of data and projecting it to the whole year can lead to an inaccurate ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Statistics A First Course

Authors: David M. Levine, Kathryn A. Szabat, David F. Stephan

7th Edition

9780321998217, 032197901X, 321998219, 978-0321979018

More Books

Students also viewed these Accounting questions