The Oceanside Hotel is adjacent to City Coliseum, a 24,000-seat arena that is home to the city’s professional basketball and ice hockey teams and that hosts a variety of concerts, trade shows, and conventions throughout the year. The hotel has experienced the following occupancy rates for the nine years since the coliseum opened: Year123456789 Occupancy Rate 75% 70% 72% 77% 83% 81% 86% 91% 87% Compute an exponential smoothing forecast with α = 0.20, an adjusted exponential smoothing forecast with α = 0.20 and β = 0.20, and a linear trend line forecast. Compare the three forecasts using MAD and average error (?̅), and indicate which forecast seems to be most accurate.

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Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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The Oceanside Hotel is adjacent to City Coliseum, a 24,000-seat arena that is home to the city’s professional basketball and ice hockey teams and that hosts a variety of concerts, trade shows, and conventions throughout the year. The hotel has experienced the following occupancy rates for the nine years since the coliseum opened:

Year	1	2	3	4	5	6	7	8	9
Occupancy Rate	75%	70%	72%	77%	83%	81%	86%	91%	87%

Compute an exponential smoothing forecast with α = 0.20, an adjusted exponential smoothing forecast with α = 0.20 and β = 0.20, and a linear trend line forecast. Compare the three forecasts using MAD and average error (?̅), and indicate which forecast seems to be most accurate.

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