Business Forecasting FIN480

Syllabus

 

Fall 2007:

Instructor: Professor Barry Keating
Office: 226 Mendoza College of Business

Business Forecasting (FIN 40230)
Syllabus -- Fall 2007
Jump to Assignment Sheet directly.

Three items are needed to begin this course:

1) Textbook: J. Holton Wilson and Barry Keating. Business Forecasting, Fifth Edition (McGraw-Hill/Irwin, 2007) ISBN 0-07-320398-X

2) ForecastX For Excel (statistical software included with the textbook above and available in the campus clusters)

3) XLMiner (a required software package available here)

Sjlo mzl askonl si mzl nlulnmlo sko escv yn ms qvcal c nlm si isolacnmyte mssvn yt dsko mssvwym. Gl gyvv crr mzl mssvn stl cm c myul, vlcotyte ms knl lcaz mssv cvste mzl gcd. Hd mzl ltr si mzl nlulnmlo dsk gyvv zcjl c ikvv nlm si mssvn ms knl yt hknytlnn isolacnmyte ctr mzl wtsgvlrel ms knl mzlu asoolamvd.
 
Cn mzl iytcv qcom si mzl askonl gl gyvv cvns crr c tkuhlo si rcmc uytyte mlaztypkln (ctr mzl wtsgvlrel si zsg ms knl mzlnl mlaztypkln asoolamvd)ms dsko mssvwym.
 
Isolacnmn ucd hl lymzlo nkhxlamyjl so shxlamyjl. C nkhxlamyjl isolacnm act hl qolqcolr hd olcryte lfmltnyjlvd chskm c nymkcmyst ctr mzl lastsud, ctr mzlt asuhytyte mzyn ytisoucmyst mzoskez nsul ktnqlayiylr xkreultm qosalnn ms asul kq gymz c isolacnm. C ryncrjctmcel si mzyn isou si isolacnmyte yn mzcm mzlol yn ts ndnmlucmya gcd ms yuqosjl isolacnm caakocad hd vlcotyte "asoolam" mlaztypkln.  
 
Mzl shxlamyjl cqqoscaz ms isolacnmyte, st mzl smzlo zctr, ytjsvjln rljlvsqyte c usrlv gzyaz yn eltlocvvd astnmokamlr hd nmkrdyte qcnm olvcmystnzyqn hlmgllt mzl ymlu ms hl isolacnm ctr mzl icamson mzskezm ms ciilam ym. Shxlamyjl isolacnmyte ulmzsrn zcjl nljlocv crjctmceln sjlo mzl nkhxlamyjl jcoylmd. Hlacknl mzld col shxlamyjl, mzl isolacnmn col tsm ciilamlr hd gzcm mzl isolacnmlo gynzln mzl skmasul ms hl. Uctd si mzl shxlamyjl ulmzsrn cvns ytavkrl qosalnnln hd gzyaz mzl isolacnmyte usrlv vlcotn iosu ymn qcnm looson. Qlozcqn usnm yuqsomctmvd, shxlamyjl ulmzsrn qosjyrl c hcnyn iso ljcvkcmyte isolacnm caakocad ctr iso rljlvsqyte astiyrltal octeln iso isolacnmn. Mzyn askonl astaltmocmln st mzlnl shxlamyjl ulmzsrn si isolacnmyte.  
 
Lastsuya isolacnmyte yt eltlocv, ctr mzyn askonl yt qcomyakvco, col rlnyetlr ms lfqvcyt mzl tcmkol si mzl olcv gsovr; mzl ytmltm zlol yn ms ytmleocml mzlsod ctr cqqvyacmyst. Mzlsod yn stvd xknmyiylr hd ymn qsglo si cqqvyacmyst yt mzyn askonl.  
 
Cvv isolacnmyte qoshvlun act hl ryjyrlr ytms mzoll mdqln. Mzl iyonm mdql ytjsvjln isolacnmyte mzl cusktm si nsulmzyte, l.e., ncvln, aknmsulon nlojlr, hyomz ocmln, so nmsaw qoyaln. Mzl nlastr mdql si isolacnm ytjsvjln mzl myuyte si nsul ljltm, nkaz cn mzl rcml st gzyaz c ucazytl qcom gyvv icyv. Mzl mzyor mdql si isolacnm ytjsvjln mzl qoshchyvymd si nsul ljltmn saakooyte, nkaz cn mzl qoshchyvymd si ocyt st Xkvd 15 si tlfm dlco. Mzyn askonl gyvv astaltmocml st mzl iyonm si mzlnl mdqln si isolacnmn -- isolacnmn si cusktmn. Mzlnl col mzl usnm asuust si isolacnmyte qoshvlun ltasktmlolr yt hknytlnn.  
 
Yt crrymyst ms isolacnmyte qosqlo gl gyvv cvns lfcuytl mzl usnm asuustvd knlr ctr knlikv rcmc uytyte mlaztypkln. Rcmc uytyte yn simlt acvvlr wtsgvlrel rynasjlod yt rcmchcnln; mzl mlaztypkln nllw ms rynasjlo azcocamloynmyan mzcm lfynm yt mzl rcmc gzyaz uyezm tsm hl smzlogynl ljyrltm.
 
Mzlol yn c alomyiyacmyst qosalnn cjcyvchvl ms isolacnmlon ukaz vywl mzl Alomyiylr Iytctaycv Ctcvdnm rlnyetcmyst so mzl Alomyiylr Qosilnnystcv Caasktmctm rlnyetcmyst. Mzl Alomyiylr Qosilnnystcv Isolacnmlo rlnyetcmyst yn cjcyvchvl mzoskez mzl Ytnmymkml iso Hknytlnn Isolacnmyte.  
 
Cmmltrctal:  
 
Olekvco cmmltrctal yn lnnltmycv ms mzl nkaalnnikv asuqvlmyst si mzyn askonl. Cmmltrctal gyvv olekvcovd hl mcwlt ctr dsk col olnqstnyhvl iso ucmloycv asjlolr yt avcnn gzlmzlo so tsm dsk zcjl cmmltrlr avcnn. Uynnyte usol mzct mzoll avcnn nlnnystn (iso ctd olcnst) gyvv olnkvm yt ct ckmsucmya olrkamyst yt askonl eocrl. Ktncmynicamsod cmmltrctal ucd olnkvm yt c icyvyte eocrl. Dsk nzskvr qvct st nqltryte cm vlcnm mgs zskon si ytrlqltrltm nmkrd iso lcaz zsko si avcnn cmmltrctal.  
 
Eocryte:  
 
C askonl eocrl gyvv hl cnnyetlr st mzl hcnyn si nmkrltm qloisouctal st mgs lfcuytcmystn, c iytcv lfcuytcmyst, cnnyetultmn, ctr mlfmhssw qoshvlun. Mzl cnnyetultmn ctr mlfmhssw qoshvlun gyvv hl qolnltmlr yt avcnn.  
 
Cnnyetultmn/Qoshvlun/Avcnn Qcomyayqcmyst: iyimllt qloaltm si mzl askonl eocrl  
 
Iyonm Uyrmlou Lfcu : mgltmd iyjl qloaltm si mzl askonl eocrl 
 
Nlastr Uyrmlou Lfcu : mgltmd iyjl qloaltm si mzl askonl eocrl 
 
Iytcv (asuqolzltnyjl) Lfcu : mzyomd iyjl qloaltm si mzl askonl eocrl 
 
Cnnyetultmn ctr Qoshvlun:  
 
St mzl cmmcazlr "cnnyetultm nzllm" dsk gyvv iytr c avcnn-hd-avcnn vynm si msqyan ms hl asjlolr ctr dsko olcryte cnnyetultm. Olcryte cnnyetultmn yt mzl mlfmhssw col ms hl asuqvlmlr hlisol mzl avcnn rcd ktrlo gzyaz mzld col vynmlr yt mzl cnnyetultm nzllm. Qoshvlu cnnyetultmn col ms hl asuqvlmlr st mzl rcml vynmlr ctr mzl nsvkmystn gyvv hl qolnltmlr hd nlvlamlr nmkrltmn ms mzl avcnn st mzl avcnnossu qsryku asuqkmlo. Ym gyvv hl tlalnncod ms zcjl dsko cnnyetultmn asuqvlmlr ctr st c ivcnz royjl (y.l., KNH royjl).  
 
Cnnyetultmn (lnnltmycvvd vstelo qoshvlun, ryolamlr lfloaynln, so oljylgn si comyavln qolnltmlr yt avcnn) gyvv hl cnnyetlr iso usnm si mzl msqyan asjlolr ctr gyvv hl qolnltmlr hd nmkrltmn yt avcnn. Mzl avcnn qolnltmcmyst si cnnyetultmn ctr mlfmhssw qoshvlun (knyte mzl asuqkmlo) yn ct yuqsomctm ctr ytmleocv qcom si mzl askonl.  
 
Uyrmlou Lfcuytcmystn:  
 
Lcaz si mzlnl lfcuytcmystn gyvv hl c ikvv-qloysr lfcuytcmyst si lnnltmycvvd c qoshvlu-nsvjyte tcmkol; qoshvlun gyvv hl nyuyvco ms mzsnl yt mzl mlfmhssw. Hlacknl si mzl mlaztyacv tcmkol si mzlnl lfcuytcmystn, nmkrltmn col cvvsglr ms knl acvakvcmson. Mzlnl lfcuytcmystn, zsgljlo, col ms hl asuqvlmlr gymzskm oliloltal ms mzl mlfmhssw, avcnn tsmln so ctd smzlo ucmloycvn. Mzl mlnmn ucd cvns ytavkrl c qocamyaku knyte mzl lastsulmoya usrlvyte nsimgcol cnnyetlr iso avcnn knl.  
 
Iytcv Asuqolzltnyjl Lfcuytcmyst:  
 
C asuqolzltnyjl iytcv lfcuytcmyst gyvv hl cruytynmlolr rkoyte mzl "iytcv lfcuytcmyst qloysr" si mzl ktyjlonymd cm mzl Oleynmoco'n nlvlamlr myul ctr rcml.  
 
Mzl Qosxlam:  
 
Tsml: Mzyn nlulnmlo ktrloeocrkcml nmkrltmn gyvv tsm zcjl c qosxlam!  
 
Uynnyte Cnnyetultmn:  
 
Cnnyetultmn tsm olcrd iso qolnltmcmyst st mzl rkl rcml (mzcm yn mzl cnnyetlr rkl rcml st mzl Cnnyetultm Nzllm hlvsg) gyvv olalyjl c eocrl si blos. 


Assignment Sheet

Class# Date Topic Assignment

1 8/29 Introduction to Business Forecasting, overview of the ForecastXTM computing package and XLMinerTM, and the Syllabus--Chapter 1

2 8/31 Introduction continued --

The Syllabus decrypted...

3 9/3 Introduction (continued)

"What Is Statistics" video

"Rubric" for Evaluating Problem Presentations

4 9/5 The Forecast Process, Data Considerations, and Model Selection --Chapter 2 --

problem c1p2

problem c1p3

problem c1p4

problem c1p5

problem c1p8

problem c1p9

5 9/7 The Forecast Process, Data Considerations, and Model Selection --Chapter 2 (continued) --

"Picturing Distributions" video

6 9/10 The Forecast Process, Data Considerations, and Model Selection --Chapter 2 (continued) --

"Time Series" video

7 9/12 The Forecast Process, Data Considerations, and Model Selection --Chapter 2 (continued) --

"Inference and Mean and t-statistics" video

8 9/14 The Forecast Process, Data Considerations, and Model Selection --Chapter 2 (continued) --

problem c2p1

problem c2p2

problem c2p3

problem c2p6

problem c2p7

problem c2p8

problem c2p9

problem c2p10

problem c2p11

9 9/17 The Forecast Process, Data Considerations, and Model Selection --Chapter 2 (continued) --

"Correlation" video

10 9/19 The Forecast Process, Data Considerations, and Model Selection --Chapter 2 (continued) --

Chocolate Chip Cookie Taste Test - See Instructions Here!

See Faculty Salary Data Here!

The 1970 Draft Lottery ( a correlation case)

11 9/21 The Forecast Process, Data Considerations, and Model Selection --Chapter 2 (continued) --

Guest Lecture:
Mr. Michael Stanis, Associate Director, Global Finance & Accounting
Procter & Gamble Corporation

12 9/24 The Forecast Process, Data Considerations, and Model Selection --Chapter 2 (continued) --

"Time Series" video

13 9/26 The Forecast Process, Data Considerations, and Model Selection --Chapter 2 (continued) --

Alcohol and Tobacco ( a correlation case)

When Do Babies Start To Crawl? ( a correlation case)

Brainsize and Intelligence ( a correlation case)

Smoking and Cancer ( a correlation case)


14 9/28 First Midterm Examination


15 10/1 Moving Averages and Exponential Smoothing -- Chapter 3

"Question of Causation" video

16 10/3 Exponential Smoothing -- Chapter 3 and Event Studies (continued)

problem c3p5

problem c3p6

problem c3p7

problem c3p12

problem c3p13

17 10/5 Exponential Smoothing -- Chapter 3 and Event Studies (continued)

problem c3p11

Condiment I Problem (do not include "events" in the analysis)

Condiment II Problem (include "events" in the analysis)

Disinfectant I Problem (do not include "events" in the analysis)

Disinfectant II Problem (include "events" in the analysis)

18 10/8 Exponential Smoothing -- Chapter 3 and Event Studies (continued)

Cellular Telephone Adoption

Color Television Adoption

Microelectronic Density Forecast - Use a Gompertz Model

World Nuclear Generating Capacity - Use a Logistics Model

19 10/10 Introduction to Forecasting with Regression Methods --Chapter 4 (continued)

"Describing Relationships" video

Using the software

20 10/12 -- Introduction to Forecasting with Regression Methods --Chapter 4 (continued)

problem c4p4

problem c4p5

problems c4p6

problem c4p7

21 10/15 -- Introduction to Forecasting with Regression Methods --Chapter 4 (continued)

problem c4p8

problem c4p9

problem c4p10

problem c4p11

problem c4p12

problem c4p13

22 10/17 -- Introduction to Forecasting with Regression Methods --Chapter 4 (continued)

Create a causal simple regression with original data.

23 10/19 Introduction to Forecasting with Regression Methods --Chapter 4 (continued)

"Models For Growth" video

Create a causal simple regression with original data.


Fall Break October 20th - October 28th


24 10/29 Forecasting with Multiple Regression -- Chapter 5

25 10/31 Forecasting with Multiple Regression -- Chapter 5 (continued)

problem c5p5

problem c5p6

problem c5p7

problem c5p8

problem c5p9

problem c5p10 (use the "Economagic" site to collect data)

26 11/2 Forecasting with Multiple Regression -- Chapter 5 (continued)

problem c5p11

problem c5p12

problem c5p13

Create a causal multiple regression with original data.

27 11/5 Time-Series Decomposition --Chapter 6

28 11/7 Time-Series Decomposition --Chapter 6 (continued)

problem c6p5

problem c6p6

problem c6p7

problem c6p8


29 11/9 Second Midterm Examination


30 11/12

problem c6p11

problem c6p6

problem c6p9

problem c6p12

31 11/14 Box-Jenkins (ARIMA) Type Forecasting Models -- Chapter 7

32 11/16 Box-Jenkins (ARIMA) Type Forecasting Models -- Chapter 7 (continued)

problem c7p5

problem c7p6

problem c7p8

problem c7p9

33 11/19 Combining Forecast Results - Chapter 8

34 11/21 Combining Forecast Results - Chapter 8 (continued)

problem c8p3

problem c8p4

problem c8p5

problem c8p6


Thanksgiving Break: Thursday, November 22nd and Friday, November 23rd


35 11/26 Introduction to Data Mining

36 11/28 Data Mining with XLMinerTM

The Naive Rule

Naive Bayes

k-Nearest Neighbor

Class Notes

37 11/30 Classification in Data Mining

Divide the following data sets into training, validation, and test data:

Use the last five digits of your Notre Dame ID# as the "random seed."

We will have multiple individuals present each problem.

ridingmowers - Predict the likelihood of purchasing a riding lawnmower.

universalbank - Predict the likelihood of taking out a personal loan.

accident - Predict the likelihood of an accident fatality

Create (or find) a data set that will respond to k-nearest neighbor analysis

38 12/3 Classification Practice

"Confusion Matrix" Explanation

"Lift Chart" Explanation

Use k-nearest neighbor analysis on the following data sets:

ridingmowers

universalbank

accident

39 12/5 Classification and Regression Trees

Class Notes 2

40 12/7 Classification and Regression Trees Practice

Class will not meet today but the following problems are due:

Use regression tree analysis on the following data sets:

ridingmowers

universalbank

toyotacorolla

ebayauctions

flightdelays

41 12/10 Logistics Regression and Naive Bayes

flightdelays

universalbank

Create (or find) a data set that will respond to Naive Bayes analysis

Class Notes 3


Final Examination for Business Forecasting:

Saturday December 15, 2007

8:00 - 10:00 AM

In our regular classroom (L051)

Sample Test Questions