Business Forecasting

by Hanke, John E.; Reitsch, Arthur G.; Wichern, Dean W.

• ISBN13: 9780130878106
• ISBN10: 0130878103
• Edition: 7th
• Format: Hardcover
• Copyright: 2001-01-01
• Publisher: PRENTICE HALL

Summary

For undergraduate and graduate courses in Business Forecasting, found in Decision Science and Economic departments. This best-selling text continues to be written in a simple, straightforward style and to make extensive use of practical business examples. Many exercises and forty-four cases are included to provide the link between theoretical concepts and their real-world applications. Statistical packages (Excel and Minitab) are referenced throughout.

Table of Contents

Preface	xiii
Introduction to Forecasting	1	(12)
History of Forecasting	1	(1)
Need for Forecasting	1	(2)
Types of Forecasts	3	(1)
Macroeconomic Forecasting	4	(1)
Choosing a Forecasting Method	4	(1)
Forecasting Steps	4	(2)
Managing the Forecasting Process	6	(1)
Computer Forecasting Packages	6	(1)
Forecasting Example	7	(1)
Summary	8	(1)
Mr. Tux	9	(1)
Consumer Credit Counseling	9	(1)
Minitab Applications	10	(1)
Excel Applications	11	(1)
References and Selected Bibliography	12	(1)
A Review of Basic Statistical Concepts	13	(40)
Describing Data with Numerical Summaries	13	(4)
Displays of Numerical Information	17	(3)
Probability Distributions	20	(3)
Sampling Distributions	23	(2)
Inference from a Sample	25	(4)
Estimation	25	(1)
Hypothesis Testing	26	(3)
Correlation Analysis	29	(5)
Scatter Diagrams	29	(3)
Correlation Coefficient	32	(2)
Fitting a Straight Line	34	(4)
Assessing Normality	38	(1)
Application to Management	39	(1)
Glossary	40	(1)
Key Formulas	40	(1)
Problems	41	(5)
Alcam Electronics	46	(1)
Mr. Tux	47	(1)
Alomega Food Stores	48	(1)
Minitab Applications	49	(2)
Excel Applications	51	(1)
References and Selected Bibliography	52	(1)
Exploring Data Patterns and Choosing a Forecasting Technique	53	(42)
Exploring Time Series Data Patterns	54	(2)
Exploring Data Patterns with Autocorrelation Analysis	56	(13)
Are the Data Random?	61	(1)
Do the Data Have a Trend?	62	(6)
Are the Data Seasonal?	68	(1)
Choosing a Forecasting Technique	69	(5)
Forecasting Techniques for Stationary Data	70	(1)
Forecasting Techniques for Data with a Trend	71	(1)
Forecasting Techniques for Data with Seasonality	71	(1)
Forecasting Techniques for Cyclical Series	72	(1)
Other Factors to Consider When Choosing a Forecasting Technique	72	(1)
Empirical Evaluation of Forecasting Methods	73	(1)
Measuring Forecasting Error	74	(3)
Determining the Adequacy of a Forecasting Technique	77	(1)
Application to Management	78	(1)
Glossary	79	(1)
Key Formulas	80	(1)
Problems	81	(4)
Murphy Brothers Furniture	85	(2)
Mr. Tux	87	(1)
Consumer Credit Counseling	88	(1)
Alomega Food Stores	89	(1)
Minitab Applications	89	(2)
Excel Applications	91	(2)
References and Selected Bibliography	93	(2)
Moving Averages and Smoothing Methods	95	(48)
Naive Models	96	(3)
Forecasting Methods Based on Averaging	99	(8)
Simple Averages	99	(2)
Moving Averages	101	(3)
Double Moving Averages	104	(3)
Exponential Smoothing Methods	107	(16)
Exponential Smoothing Adjusted for Trend: Holt's Method	114	(3)
Exponential Smoothing Adjusted for Trend and Seasonal Variation: Winters' Method	117	(6)
Application to Management	123	(1)
Glossary	124	(1)
Key Formulas	124	(2)
Problems	126	(5)
The Solar Alternative Company	131	(1)
Mr. Tux	132	(1)
Consumer Credit Counseling	133	(1)
Five-Year Revenue Projection for Downtown Radiology	133	(6)
Minitab Applications	139	(2)
Excel Applications	141	(1)
References and Selected Bibliography	142	(1)
Time Series and Their Components	143	(50)
Decomposition	144	(3)
Trend	147	(6)
Additional Trend Curves	150	(3)
Forecasting Trend	153	(1)
Seasonality	153	(5)
Seasonally Adjusted Data	158	(1)
Cyclical and Irregular Variations	158	(6)
Forecasting a Seasonal Time Series	164	(1)
The Census II Decomposition Method	165	(2)
Application to Management	167	(1)
Appendix: Price Index	168	(2)
Glossary	170	(1)
Key Formulas	170	(1)
Problems	171	(7)
The Small Engine Doctor	178	(1)
Mr. Tux	179	(4)
Consumer Credit Counseling	183	(1)
AAA Washington	183	(2)
Alomega Food Stores	185	(2)
Minitab Applications	187	(2)
Excel Applications	189	(3)
References and Selected Bibliography	192	(1)
Simple Linear Regression	193	(48)
Regression Line	193	(5)
Standard Error of the Estimate	198	(1)
Forecasting Y	199	(3)
Decomposition of Variance	202	(3)
Coefficient of Determination	205	(3)
Hypothesis Testing	208	(2)
Analysis of Residuals	210	(3)
Computer Output	213	(2)
Variable Transformations	215	(4)
Application to Management	219	(2)
Glossary	221	(1)
Key Formulas	221	(1)
Problems	222	(9)
Tiger Transport	231	(1)
Butcher Products, Inc.	232	(2)
Ace Manufacturing	234	(1)
Mr. Tux	235	(1)
Consumer Credit Counseling	235	(1)
Minitab Applications	236	(2)
Excel Applications	238	(2)
References and Selected Bibliography	240	(1)
Multiple Regression Analysis	241	(53)
Several Predictor Variables	241	(1)
Correlation Matrix	242	(1)
Multiple Regression Model	243	(2)
Statistical Model for Multiple Regression	244	(1)
Interpreting Regression Coefficients	245	(1)
Inference for Multiple Regression Models	246	(5)
Standard Error of the Estimate	247	(1)
Significance of the Regression	248	(2)
Individual Predictor Variable	250	(1)
Forecast of a Future Response	251	(1)
Computer Output	251	(1)
Dummy Variables	252	(4)
Multicollinearity	256	(3)
Selecting the ``Best'' Regression Equation	259	(7)
All Possible Regressions	261	(2)
Stepwise Regression	263	(3)
Final Notes on Stepwise Regression	266	(1)
Regression Diagnostics and Residual Analysis	266	(2)
Forecasting Caveats	268	(1)
Overfitting	268	(1)
Useful Regressions, Large F Ratios	269	(1)
Application to Management	269	(2)
Glossary	271	(1)
Key Formulas	271	(1)
Problems	272	(8)
The Bond Market	280	(2)
Fantasy Baseball (A)	282	(6)
Fantasy Baseball (B)	288	(3)
Minitab Applications	291	(1)
Excel Applications	292	(1)
References and Selected Bibliography	293	(1)
Regression with Time Series Data	294	(52)
Time Series Data and the Problem of Autocorrelation	294	(4)
Durbin-Watson Test for Serial Correlation	298	(3)
Solutions to Autocorrelation Problems	301	(12)
Model Specification Error (Omitting a Variable)	302	(2)
Regression with Differences	304	(5)
Generalized Differences and an Iterative Approach	309	(3)
Autoregressive Models	312	(1)
Time Series Data and the Problem of Heteroscedasticity	313	(3)
Using Regression to Forecast Seasonal Data	316	(3)
Econometric Forecasting	319	(1)
Application to Management	320	(1)
Glossary	320	(1)
Key Formulas	320	(2)
Problems	322	(7)
Company of Your Choice	329	(1)
Business Activity Index for Spokane County	329	(4)
Restaurant Sales	333	(2)
Mr. Tux	335	(2)
Consumer Credit Counseling	337	(2)
AAA Washington	339	(2)
Alomega Food Stores	341	(1)
Minitab Applications	342	(1)
Excel Applications	343	(2)
References and Selected Bibliography	345	(1)
The Box-Jenkins (ARIMA) Methodology	346	(75)
Box-Jenkins Methodology	346	(8)
Autoregressive Models	351	(1)
Moving Average Models	352	(2)
Autoregressive Moving Average Models	354	(1)
Summary	354	(1)
Implementing the Model-Building Strategy	354	(23)
Model Identification	354	(2)
Model Estimation	356	(1)
Model Checking	357	(1)
Forecasting with the Model	358	(19)
Final Comments	377	(1)
Model Selection Criteria	377	(2)
Models for Seasonal Data	379	(12)
Simple Exponential Smoothing and an ARIMA Model	391	(1)
Advantages and Disadvantages of ARIMA Models	391	(1)
Application to Management	392	(1)
Glossary	393	(1)
Key Formulas	393	(1)
Problems	394	(10)
Restaurant Sales	404	(1)
Mr. Tux	405	(2)
Consumer Credit Counseling	407	(1)
The Lydia E. Pinkham Medicine Company	407	(3)
City of College Station	410	(3)
UPS Air Finance Division	413	(3)
Minitab Applications	416	(2)
Excel Applications	418	(1)
References and Selected Bibliography	419	(2)
Judgmental Elements in Forecasting	421	(17)
Growth Curves	422	(2)
The Delphi Method	424	(1)
Scenario Writing	425	(1)
Combining Forecasts	426	(1)
Forecasting and Neural Networks	427	(2)
Summary of Judgmental Forecasting	429	(1)
Other Techniques Useful in Forecasting	430	(3)
Key Formulas	433	(1)
Golden Gardens Restaurant	434	(1)
The Lydia E. Pinkham Medicine Company Revisited	434	(3)
References and Selected Bibliography	437	(1)
Managing the Forecasting Process	438	(19)
The Forecasting Process	438	(1)
Monitoring Forecasts	439	(4)
Forecasting Steps Reviewed	443	(1)
Forecasting Responsibility	444	(1)
Forecasting Costs	445	(1)
Forecasting and the MIS System	445	(1)
Selling Management on Forecasting	446	(1)
The Future of Forecasting	446	(1)
Boundary Electronics	447	(1)
Busby Associates	447	(4)
Consumer Credit Counseling	451	(1)
Mr. Tux	452	(1)
Alomega Food Stores	453	(1)
References and Selected Bibliography	454	(3)
Appendix A Derivations	457	(2)
Appendix B Data for Case Study 7.1	459	(2)
Appendix C Tables	461	(11)
Appendix D Data Sets and Databases	472	(21)
Index	493