Students will apply information from the chapter to concepts and problems related to Demand Forecasting.

Read the case study on pages 174-175 of your textbook and answer the following discussion questions?

1. Since Quincy doesnt have any historical data (only an estimate of the number of customers hell serve each month), which specific type of qualitative method is he using? What would be the total number of customers based on his assumptions? Is this a realistic number to allow the business to survive? He estimates his average fee will be $25.
2. Because of the type of communities, overtime Smithburg will provide 20 percent of the homes as customers, Emeryville still 10 percent, and Golf Creek only 7 percent. Assuming he was charging $25 per home, what effect does this change in monthly forecast have on his monthly revenue? Should he change his price either up or down? Explain.
3. Quincy has been gathering data for over five years now. He has a record of how many customers he had each month. He also has information on the weather, for example, which month has the most rain. Quincy wants to use this data to improve his forecasting. He has a choice of cause-and-effect models. Based on what data he has and what he wants to do, what would be the best method from the choices he has? Explain the elements of the forecasting equation.