Let's re-examine the information presented previously in problem 2. Following are the number of victories for the Blue Sox and the hotel occupancy rate for the past eight years.You have been asked to test two forecasting methods to see which method provides a better forecast for theOccupancy Rate.The forecasting methods to test are to see whetherOccupancy Rateis a) a function oftimeor b) a function of theNumber of Blue Sox Wins.

Year

Number of Blue Sox Wins

Occupancy Rate

1

70

78%

2

67

83

3

75

86

4

87

85

5

87

89

6

91

92

7

89

91

8

85

94

For the following, calculate all forecasts to one decimal place (example, 93.2%)

a)Suppose we believe that there is a linear relationship between theYearand theOccupancy Rate.Develop a forecast for theOccupancy Rateassuming that this relationship is valid.What is this relationship and what is the forecast for theOccupancy Ratefor Year 10?Provide both the appropriate regression relationship and the forecast.

b)Now, suppose that we believe that there is a linear relationship between theNumber of Blue Sox Winsand theOccupancy Rate.What is this relationship and what is the forecast for theOccupancy Rateif theNumber of Blue Sox Winsis 98 wins?What caution(s) would you recommend about using the linear regression relationship for predicting the occupancy rate for this number of wins?Provide both the appropriate regression relationship and the forecast.

c)How strong are the relationships you found in both a) and b)?You are wondering if either of these should be considered - not which is better.Would you recommend using either of these relationships for forecasting?Why?