MGTSC 405: Forecasting for Planners and Managers
SYLLABUS Fall 2005
I. INTRODUCTION
Forecasting skills are in high demand!
MGTSC 405 is concerned with methods used to predict the uncertain nature of business trends in an effort to help managers make better decisions and plans. Such efforts often involve the study of historical data and manipulation of these data to search for patterns that can be effectively extrapolated to produce forecasts.
This is a business statistics course that covers all aspects of business forecasting where the emphasis is on intuitive concepts and applications. Because forecasting is best taught through practice, the course is loaded with numerous real, relevant, business oriented cases and examples that you can use to practice the application of concepts.
The course includes a separate computer practice session to allow you immediately apply what you have learned to industry data. While this helps you learn the professional
software Forecast Pro; more importantly, you learn how to analyze and interpret forecast outputs.
Prerequisites: MGTSC 312,352. You should not take this course if you dislike formulae, statistics and handling large amount of data in Excel. Please be aware that this is not an Operations Management (OM) course. Please discuss this course with other students who have previously taken it so that you will not underestimate the work requirement.
II. GENERAL INFORMATION
Professor: Dr. Dawit Zerom Office: Business 2 43, Phone: 492 3622 Office Hours: F 14.00 – 16.00 and by appointment
Email: [email protected]
Lecture Time and Location: M & F 10.00 – 10.50 in Bus 2 9 W 10.00 – 10.50 in B-28
Lab access priority: W 14.00 – 16.00 in B-28
Weekly Feedback (very important!):
• Every Friday (after class), send me a one-minute email specifying 1) the one thing you learned and found interesting; and 2) the one thing you do not understand and need more discussion.
• Emailing feedbacks is not mandatory! But, I greatly value any of your comments or suggestions.
In all of your emails directed to me:
• Use your U of A email address. I do not open any other emails. Give a specific subject to your email
III. COURSE OUTLINE / GOALS
The basics of forecasting: properties of data ♦ overview of methods
♦ evaluating forecast accuracy.
Exponential smoothing methods: simple one, Holt two and Winters three parameter ♦ Event models
Time series decomposition: components of data ♦ business cycle
♦ Census X-11
Box-Jenkins models: advantages and disadvantages ♦ automatic identification
♦ differencing ♦ diagnostics
Regression models: when to use ♦ standard OLS ♦ lagged variables ♦ Cochrane-Orcutt ♦ Hypothesis tests
Special forecasting topics / industry forecasting practices: short-lived products forecasting ♦ judgmental forecasting.
By the end of the course you will know how to:
Navigate effectively and efficiently through Forecast Pro; set up your input data easily and quickly; save results via custom reports, graphs, spreadsheets and audit trails.
Select appropriate forecasting techniques.
Build automatic and custom forecast models.
Model promotions, outliers and irregular seasonality using Event models.
Build multiple level models to forecast product hierarchies.
And much more.
In short, by the end of the course you will not only have gained considerable insight into business forecasting, but will also be at the level of solving your own forecasting problems.
IV. COURSE MATERIAL/SOFTWARE
Because there is no one book which adequately covers all of the material in this course at an appropriate level, I will provide short lecture notes either in a power point format or MS word format.
Unless explicitly stated, my notes and regular attendance are sufficient to successfully complete all the required computer-based assignments and the term project.
However, for quizzes, my notes and regular attendance may not be sufficient. Whenever additional reading is necessary, the relevant sources (can be books, journal articles, etc) will be indicated.
Important: In every class meeting, please bring with you copies of the relevant reading materials. Reading materials will be posted before 7.00 P.M. the previous day.
Reference books:
You are not required to purchase any book for this course!
Here are some books that supplement class discussion. These books are available in library reserve at Rutherford.
1) Business Forecasting, 8th Edition: by John Hanke and Dean Wichren.
2) Business Forecasting with accompanying Excel-based Forecast X software, 4th edition: by Wilson and Keating
3) Practical Business Forecasting: by Michael Evans 4) Forecasting Principles and Applications: by S. DeLurgio
5) Forecasting: methods and applications, 3rd edition: by Makridakis, Wheelwright and Hyndman
Software:
1) Forecast Pro XE (Extended Edition) – a professional software 2) MS Excel
Forecast Pro is available only in B-28. The only way you can work with this software is by coming to the lab. Every Wed 14.00 – 16.00, MGTSC 405 students are given priority.
V. COURSE ASSESSMENT
In this course students will be assessed based on their performance in three categories of evaluation:
1) Two case-based group assignments;
2) Three individual quizzes;
3) A group Term Project
Breakdown of the allocation of marks will be done as follows:
1) Two Assignments (20%)
Home work 1 (10%): Due TBA
Home work 2 (10%): Due TBA
Both assignments are to be completed in a group of at most 3 students and students are responsible for forming their own groups. Submission is to be done in class and deadlines are firm. Only hard copies are accepted (no email).
There will be a penalty of 15% for late submission up to 24 hours (start counting the clock at 12.00 P.M.-noon). All submissions later than 24 hours will be given 0.
(Very Important) You must also submit peer evaluation (only hard copy) where you evaluate the performance of the members of your group. The mark of an individual may be adjusted down relative to the mark of the group, based on peer evaluations.
2) Three individual quizzes (50%) Quiz 1 (15%): October 26
This is a 50-minute quiz and will be held in the computer lab. The quiz is closed book.
You will be asked to answer 10-15 questions by making use of Forecast Pro software.
In this quiz, students should be able to identify time series patterns for given time series data using statistical tools learned in class, create forecasts, compare forecasts using various forecast accuracy criteria, create forecast reports and finally interpret them.
Quiz 2 (15%): October 28
This is a 50-minute theory-based quiz. The quiz is closed book. The quiz will consist of multiple choices, True/False, and describe-type questions. There may also be some calculations. You may bring a one-page (only one side) formula sheet.
Quiz 3 (20%): December 7
This is a 50-minute quiz to be held in the computer lab. A few theory questions are also included. The quiz is closed book
3) Term project (30%)
The project is to be completed in a group of at most 4 students and students are responsible for forming their own groups.
Due: December 16 before 17.00 P.M (Drop-box in the third floor). This deadline is firm. Late submissions up to 24 hours will incur a penalty of 10%. All
submissions later than 24 hours will be given 0.
You must also submit a peer evaluation (only hard copy) where you evaluate the performance of the members of your group.
Grades
Once your total mark is cumulated out of 100%, I will convert this into a letter grade (A+, A, A-, B+, B, etc…). The median grade for this course will be B+. For the distribution of grades, I will roughly follow the University of Alberta grade regulation for 400 level courses.
If you are not convinced of the grade and need explanation / verification, you should contact me as soon as possible.
(Very Important!) Peer evaluations can seriously affect your final grade.
Class Participation
Although there is no specific mark attributed to participation, active
participation in class discussions may help a student in the boundary between two grades to be moved to the upper grade. For example, suppose a student obtained B- for getting 77% and B is given for marks between, say 79%-83%.
If such student was good in her/his participation (based on my discretion), I may consider moving the grade from B- to B.
Participation is measured by the quality and extent of your effort in various discussions as well as the sophistication of your comments and analysis.
To reap the potential benefit of participation, you must come to class fully prepared to actively engage in class discussions and exercises.
VI. THINGS YOU SHOULD BE AWARE OF
You are expected to attend all classes. Given the nature of the course wherein group marks make up an essential portion (50%) of the course, significant absence from class and group meetings can reduce your final course grade appreciably.
Do not show your peer evaluations to any one. Your peer evaluations are confidential.
You are responsible for any class you miss. It is your role to ask your class mates what you have missed and take appropriate action. I will not accept any question in this regard.
On condition that you turn in a written statement of valid reason such as
doctor’s note or any other compelling family situation, I will give a makeup quiz as a substitute for a missed quiz. The quiz will be held on an agreeable date.
If you plan to leave a particular class before it ends, I would appreciate if you can notify me in advance and also select a seat where you can leave the class without distraction.
Those students who commit any act of plagiarism, cheating, or
misrepresentation will be penalized. These are offences under the Code of Student Behavior. Please read the full text of The Code of Student Behavior.