Description and Purpose

This course is designed as a single semester introduction to Business Forecasting for all students.  As a prerequisite for selection of the course, a student will have already been exposed to introductory statistics (BAC 201-202).  A number of unique features will characterize and be emphasized in this course.

First, the material and methods focus on firm specific, rather than aggregate economic forecasting.  Students of applied disciplines will be exposed to those useful techniques useful in preparation of a forecast useful in strategic planning.

Second, a full scope of forecasting procedures is presented in a student-oriented format.  Interpretation of results is emphasized.  The course will include numerous examples and cases to show both the advantages and limitations of the forecasting techniques being studied.  Windows PC methods are emphasized.

Last, students will prepare a firm forecast for strategic planning.  Utility programs will be heavily employed.  Advantages and limitations of various software programs and associated computer methods will be discussed.  Students will become familiar with software programs on the personal business computers (Windows versions).  Grades will be based on a series of projects and class presentations.  Those students who have their own Windows PCs or Laptops may download systems from Leading Market Technologies.

Textbooks:

1. BUSINESS FORECASTING 3rd ed., Wilson and Keating, Irwin-McGrawHill.

2. EVIEWS USER GUIDE (on reserve).

3. Handouts.
 

COURSE OUTLINE AND READINGS

1. Introduction (Chapters 1,2)
 
 a. Why study forecasting?
 b. What is a forecast?
 c. Outline of the course
 d. Introduction to PC Software
 e. Review of Basic Statistical Concepts.

2. Simple Models (Chapter 3)

 a. Moving Averages.
 b. Exponential Smoothing.
 c. Smoothing Models with Trend and Seasonal Components.
 d. Model Fitting by Personal Business Computer
 e. Evaluating Forecasts by MSE

3. Decomposition Methods (Chapter 6)

 a. Components; Systematic and Nonsystematic.
 b. Trend fitting.
 c. Deseasonalizing data.
 d. Computer Methods.

4. General Linear and Nonlinear Models (Chapters 4,5)

 a. Linear Models.
 b. Multiple Linear Models.
 c. Polynomial Models.
 d. Model Building Techniques.
 e. Overfitting problems.
 f. Autocorrelation.
 g. Software Concepts.

5.  Advanced Topics in Time-Series Analysis of Data (Chapter 7)

 a. Sampling distribution of autocorrelations and analysis.
 b. Partial autocorrelations.
 c. Autocorrelation Analysis.
 d. Autoregressive Models.
 e. Moving Average Models.
 f. Mixed ARMA Models.
 g. Identification of Nonseasonal Models.
 h. Computer Software.
 i. Description of BJ Techniques.
 j. Preliminary Identification
 k. Estimation
 l. Diagnostic Checking
 m. Is reestimation necessary?
 n. Seasonal Models
 o. Description of final project.
 

6. Epilogue (Chapters 8,9)
 
 a. Nature of forecasting.
 b. Assessment of implementation.
 c. Forecasting as an ongoing process.
 d. Forecasting as part of the strategic plan of a firm.
 e. Gaining Acceptance of Forecasts; Use of Judgment.

 Throughout the course there will be extensive use of computing systems.  Discussion of software programs for various types of computer architectural designs will be considered.  Extensive coverage of the Eviews computer software will be considered.

 Each student will be required to complete three forecasting projects, which will be the basis of his/her grade.  She/he may find it advisable to purchase double-sided, high-density diskettes for the personal computer.  All discussions and verbal description in the projects must be typed or word-processed.

 Knowledge of a computer language such as SAS or others is not required.