FORECASTING- TECHNIQUES AND ISSES

Session: Once a week

Duration: Two Hours

Andragogy: Cases, Lectures, Hands on Exercises

Session 1:

Introduction to Forecasting
Qualitative and Quantitative Forecasting
Tools and Techniques of Qualitative Forecasting
Cases and Application MBA Starting Salaries

Session 2:

Introduction to Data Analysis

Panel Data, Cross Sectional Data, and Time Series Data
Simple Linear Regression Model
OLS Estimation
Properties of OLS Estimators
Case Title: Nils Baker, University of Virginia Darden Business Publishing.
o This short and seemingly straightforward case is an efficient vehicle for exploring
the nuances of hypothesis testing via regression modeling and t-tests in the
context of an advanced analytics course.

Session 3:

Statistical Inference in SLRM

Measuring Goodness of Fit
Relationship between Regression Slope and Correlation Coefficient
Reverse Regression
Outliers
Estimation of SLRM Using EViews
Presentation of Regression Results and Interpretation
Cases Title: Alumni Giving, University of Virginia Darden Business Publishing.
o Madison Kryswada, director of alumni relationships at State University,
assembled a 125-school data set to explore, in her words, "the drivers of alumni
giving rate." The alumni giving rate contributed 5% to the increasingly important
U.S. News & World Report rankings of U.S. colleges and universities. Wanting to
 understand the relationship between this variable and school characteristic,
Kryswada gave her assistant a list of four well-formed questions to answer.

Session 4:

Time Series Analysis

Trend, Cyclical, Seasonal and Irregular Variations, Business Cycles
Data Smoothing Techniques
Moving Average, Weighted Moving Average, Exponential Moving Average
Measurement of Errors in Smoothing Techniques
Trend Analysis Seasonality Factor, Holts Model, Winters Model
Technical Note Time Series Forecasting
Case Title: Marriott Rooms Forecasting, University of Virginia Darden Business
Publishing.
o The manager of a large downtown hotel has to decide whether to accept 60
additional reservations or not. If she accepts, she will be overbooked and face
certain costs if all the people holding reservations show up. The manager must
forecast, based on historical data, how many of the people holding reservations
will show up and then decide, after taking into account the cost involved, whether
to take the additional bookings.

Session 5:

The Multiple Linear Regression Model

BLUE Properties
Autocorrelation Sources, Consequences and Tests
Durbin-Watson Test and The Breusch Godfrey Test
Heteroskedasticity Sources, Consequences and Remedial Measures
Multicollinearity Sources, Consequences and Tests
Variance Inflation Factor
Tolerance
Cases Title: Package Pricing at Mission Hospital, IIM Bangalore
o Mission Hospital started its operations on April 02, 2008 with the aim of
providing highest quality patient care facilities to all individuals at affordable
rates. This super specialty hospital located in Durgapur, West Bengal, India,
specializes in cardiac surgeries. Many of its patients are from nearby states and
neighboring countries, and are covered under different health schemes. Among
hospitals in India, flat rate for different treatments is becoming popular, mainly
 owing to healthcare tourism and government schemes. Dr. Satyajit Bose,
chairman of Mission Hospital, was considering adoption of a package pricing
(flat fee) strategy under which patients would be provided a fixed price for their
treatment at the time of admission. This would imply that the package price
should be calculated by the hospital on the basis of patient's clinical and non-
clinical information available at the time of admission. Flat fee (or package
pricing) can result in a loss to the hospitals if they do not accurately estimate the
treatment cost for a patient. The hospital faces the challenge of identifying the key
factors that drive the total cost of treatment so that it can quote an appropriate
price to the patient.

Session 6:

Time Series Econometrics

Stochastic Process
Stationary and Non-Stationary Cases
Dicky-Fuller Test
ARIMA Forecasting
Vector Autoregressive Models (VAR)
The ARCH Model
The GARCH Model
Cases Title: Wilkins, A Zurn Company: Demand Forecasting, Richard Ivey School of
Business.
o The newly promoted inventory manager wonders if there is an easier, more
reliable means of forecasting sales demand. Currently, forecasts are based on the
plant manager's, sales/marketing manager's, and inventory manager's knowledge
of industry trends, competitive strategies, and sales history. The inventory
manager must decide if using statistical forecasting methods would ease the
forecasting process and make the forecasts more reliable. Students are exposed to
different forecasting techniques, including executive opinion, linear regression,
and time series. The data characteristics include seasonality, trend, and random
fluctuations.