The "Right to Rock" Music Festival This four-day music festival has been running for the past five years. In planning for year six, they have decided to employ a multiplicative seasonality model to forecast daily attendance. The past attendance data is shown in the accompanying Excel workbook, and is presented below: Daily attendance for past five years Year Year Year ] Year 4 Year 5 3,500 Thur 1,423 1,428 1,300 1,296 1,363 Fri 2,347 2,429 2,522 2,720 2,806 3.000 Satl 2,908 2,859 2,958 3,010 3,201 Sunday 2,635 2,678 2,729 2.537 2,449 2.500 TOTAL 9,313 3,394 9,509 9,558 9,819 2,090 Seasonal indexes Year 1 Year Year Year 4 Year 5 1,500 Thurs D.61 0.55 1.54 256 1,090 Fri 1.01 1.03 B 1.14 1.14 Thurs Fri Sut Sunday Sat 1.25 1.22 1.24 C 1.30 Sunday 1.13 1.14 1.15 1.06 D Year1 +Tear2 -Year 3 -Year4 -Years *note - for the following questions, you can use Excel or you can solve manually. It is important that, either way, you understand the manual calculation and the meaning of the numbers and results. To do: For question 1, each person in the group will calculate one of A, B, C, or D, depending on where they are in the group list (i.e. first person listed on your group page will calculate A, second person B, etc). For questions two and three, the first person will calculate the average seasonal factor for Thurs, the second person will calculate the average seasonal factor for Fri, etc. Note that you may want to calculate all answers to check your group mates, but only report your answer. 1. Calculate a missing value (A, B, C, or D) in the table, and report that result to your group and describe what it means, in your own words (e.g., It is the seasonal factor for.., and the result of .. means that...). You may also want to manually calculate a few of the other given values, to ensure that you know how the calculations are done. Help each other (on the discussion board), as needed. 2. Find the average seasonal factor for one of the four seasons (Thurs, Fri, Sat, or Sun). Report your result on the discussion board, and help others (or ask for help from others) as needed. 3. Make a forecast for one of the four seasons (Thurs, Fri, Sat, or Sun) for year 6, if total attendance in year 6 is forecast to be 10,000. Report your result; help others (or ask for help) as needed. 4. [This may be challenging for some; I am not asking everyone to nail this perfectly, but please do give it some thought and participate with your group as you can]. One of the organizers has questioned the wisdom of giving equal weighting to all five past years when calculating the average seasonal factors (as done in Q2), and has proposed that only the three most recent years should be used, with the index from the most recent year being weighted by 0.5 and the other two by 0.25. Briefly discuss your thoughts on this suggestion. (You may also wish to calculate and compare average seasonal factors under each method - using all five years, or only using the most recent three years and weighting them as proposed)
