Assignment 7 Forecasting Problems: (Chapter 12) Part 1
Title: Analytical Techniques in Public Administration
Book: Business Analytics: Data Analysis and Decision Making 5th edition
Albright & Winston, 2015 Cengage Learning (ISBN: 978-1-133-58826-9)
Statistics Tool: Download DecisionTools Suite Industrial, Textbook Edition
Using the lecture and reading information, complete the following time series analysis problem based on what you learned in Chapter 12 and the time series analysis lecture.
The file provided below contains data about a motel chain’s revenue and advertising. Use the data and time series analysis methods to accomplish the following:
- Use these data and multiple regression to make predictions of the motel chain’s revenues during the next four quarters. Assume that advertising during each of the next four quarters is $50,000. (Hint: Try using advertising, lagged by one quarter, as an explanatory variable).
- Use simple exponential smoothing to make predictions for the motel chain’s revenues during the next four quarters.
- Use Holt’s method to make forecasts for the motel chain’s revenues during the next four quarters.
- Use Winter’s method to determine predictions for the motel chain’s revenues during the next four quarters.
- Which of these forecasting methods would you expect to be the most accurate for these data? Explain.
Here is the data file Motel Chain Revenues.xlsx
Helpful hints:
Set up dummy variables in your data for Advertising(lag1), and for quarter (which would necessitate dummy variables of QTR1, QTR2, QTR3 and QTR4). For your regression model, include quarter, advertising, advertising(lag1), qtr1, qtr2 and qtr3. This will then produce the appropriate forecasting equation that you need for the problem.
Review the attached for help in coding dummy variables in this problem
