Essentials of Business Analytics 2nd Edition Camm Solutions Manual
Essentials of Business Analytics 2nd Edition Camm Solutions Manual
Chapter 8
Time Series Analysis and Forecasting
Solutions:
1. The following table shows the calculations for parts (a), (b), and (c).
Absolute Absolute
Value of Squared Value of
Time Series Forecast Forecast Forecast Percentage Percentage
Week Value Forecast Error Error Error Error Error
1 18
2 13 18 -5 5 25 -38.46 38.46
3 16 13 3 3 9 18.75 18.75
4 11 16 -5 5 25 -45.45 45.45
5 17 11 6 6 36 35.29 35.29
6 14 17 -3 3 9 -21.43 21.43
Totals 22 104 -51.30 159.38
2. The following table shows the calculations for parts (a), (b), and (c).
Absolute Absolute
Value of Squared Value of
Time Series Forecast Forecast Forecast Percentage Percentage
Week Value Forecast Error Error Error Error Error
1 18
2 13 18.00 -5.00 5.00 25.00 -38.46 38.46
3 16 15.50 0.50 0.50 0.25 3.13 3.13
4 11 15.67 -4.67 4.67 21.81 -42.45 42.45
5 17 14.50 2.50 2.50 6.25 14.71 14.71
6 14 15.00 -1.00 1.00 1.00 -7.14 7.14
Totals 13.67 54.31 -70.21 105.86
8-1
Time Series Analysis and Forecasting
3. The following table shows the measures of forecast error for both methods.
Exercise 1 Exercise 2
MAE 4.40 2.73
MSE 20.80 10.86
MAPE 31.88 21.18
For each measure of forecast accuracy the average of all the historical data provided more accurate
forecasts than simply using the most recent value.
4. a.
Squared
Time Series Forecast Forecast
Month Value Forecast Error Error
1 24
2 13 24 -11 121
3 20 13 7 49
4 12 20 -8 64
5 19 12 7 49
6 23 19 4 16
7 15 23 -8 64
Total 363
b.
Squared
Time Series Forecast Forecast
Week Value Forecast Error Error
1 24
2 13 24.00 -11.00 121.00
3 20 18.50 1.50 2.25
4 12 19.00 -7.00 49.00
5 19 17.25 1.75 3.06
6 23 17.60 5.40 29.16
7 15 18.50 -3.50 12.25
Total 216.72
8-2
Time Series Analysis and Forecasting
c. The average of all the previous values is better because MSE is smaller.
5. a.
20
18
16
14
Time Series Value
12
10
0
1 2 3 4 5 6
Week (t)
The data appear to follow a horizontal pattern.
Squared
Time Series Forecast Forecast
Week Value Forecast Error Error
1 18
2 13
3 16
4 11 15.67 -4.67 21.78
5 17 13.33 3.67 13.44
6 14 14.67 -0.67 0.44
Total 35.67
The forecast for week 7 is ŷ7 = (y4 + y5 + y6) / 3 = (11 + 17 + 14) / 3 = 14.
8-3
Time Series Analysis and Forecasting
Squared
Time Series Forecast Forecast
Week Value Forecast Error Error
1 18
2 13 18.00 -5.00 25.00
3 16 17.00 -1.00 1.00
4 11 16.80 -5.80 33.64
5 17 15.64 1.36 1.85
6 14 15.91 -1.91 3.66
Total 65.15
The forecast for week 7 is ŷ7 = y6 + (1-) ŷ6 = 0.2(14) + (1 - 0.2)15.91 = 15.53.
d. The three-week moving average provides a better forecast since it has a smaller MSE.
e. Several values of will yield an MSE smaller than the MSE associated with = 0.2. The table below
shows the resulting MSE from several different .that you select.
MSE
0.1 15.04
0.2 13.03
0.3 12.20
0.4 12.09
0.5 12.47
0.6 13.25
0.7 14.41
The value of that yields the minimum MSE is = 0.368, which yields an MSE of 12.06.
= 0.368
Squared
Time Series Forecast Forecast
Week Value Forecast Error Error
1 18
2 13 18 -5.00 25.00
3 16 16.16 -0.16 0.03
4 11 16.10 -5.10 26.03
5 17 14.23 2.77 7.69
6 14 15.25 -1.25 1.55
Total 60.30
MSE =
60.30/5= 12.06
8-4
Time Series Analysis and Forecasting
6. a.
30
25
Time Series Value
20
15
10
0
1 2 3 4 5 6 7
Week (t)
Squared
Time Series Forecast Forecast
Week Value Forecast Error Error
1 24
2 13
3 20
4 12 19.00 -7.00 49.00
5 19 15.00 4.00 16.00
6 23 17.00 6.00 36.00
7 15 18.00 -3.00 9.00
Total 110.00
The forecast for week 8 is ŷ8 = (y5 + y6 + y7) / 3 = (19 + 23 + 15) / 3 = 19.
Squared
Time Series Forecast Forecast
Week Value Forecast Error Error
1 24
8-5
Time Series Analysis and Forecasting
The forecast for week 8 is ŷ8 = y7 + (1-) ŷ7 =0.2(15) + (1 - 0.2)20.15 = 19.12.
d. The three-week moving average provides a better forecast since it has a smaller MSE.
e. Several values of will yield an MSE smaller than the MSE associated with = 0.2. The table below
shows the resulting MSE for several different values.
MSE
0.1 48.86
0.2 42.15
0.3 39.85
0.4 39.79
0.5 41.02
0.6 43.18
0.7 46.15
The value of that yields the minimum MSE is = 0.351, which yields an MSE of 39.61.
= 0.351
Squared
Time Series Forecast Forecast
Month Value Forecast Error Error
1 24
2 13 24 -11.00 121.00
3 20 20.13 -0.13 0.02
4 12 20.09 -8.09 65.40
5 19 17.25 1.75 3.08
6 23 17.86 5.14 26.40
7 15 19.67 -4.67 21.79
Total 237.69
8-6
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SO tall that he looked over most men’s heads, so strong that his
movements must be for ever circumscribed and timid, Dudley
Leicester had never in his life done anything—he had not even been
in the Guards. Least of all did he ever realize personal attitudes in
those around him. The minute jealousies, the very deep hatreds, and
the strong passions that swelled in his particular world of deep
idleness, of high feeling, and of want of occupation—in this world
where, since no man had any need of anything to do, there were so
many things to feel—Dudley Leicester perceived absolutely nothing,
no complexities, no mixed relationships. To him a man was a man, a
woman a woman; the leader in a newspaper was a series of
convincing facts, of satisfying views, and of final ideals. Belonging as
he did to the governing classes, Dudley Leicester had not even the
one outlet for passion that is open to these highly groomed and stall-
fed creatures. The tradition of the public service was in his blood. He
owned a slice of his kingdom that was more than microscopic on the
map. But though he had come into his great possessions at the age
of twenty-seven, he made no effort whatever to put things straight,
since he had more than enough to satisfy his simple needs,—to
provide him with a glass bath and silver taps, to pay his subscription
at his club, to give him his three cigars a day, his box at a music-hall
once a week, his month on the Riviera—and to leave him a thousand
or two over every year, which was the fact most worrying to his
existence.
It was Robert Grimshaw who set his estates in order; who found
him a young, hard steward with modern methods; who saw to it that
he built additions to several Church schools, and who directed the
steward to cut down the rent on overburdened farms, to raise other
rents, to provide allotments, to plant heavy land with trees, and to let
the shootings to real advantage. It was, indeed, Robert Grimshaw
who raised Dudley Leicester’s income to figures that in other
circumstances Leicester would have found intolerable. But, on the
other hand, it was Robert Grimshaw who put all the surplus back into
the estates, who had all the gates rehung, all the hedges replanted,
all the roofs of the barns ripped and retiled, and all the cottages
rebuilt. And it was Robert Grimshaw who provided him with his
Pauline.
So that at thirty-two, with a wife whom already people regarded
as likely to be the making of him, a model landlord, perfectly sure of
a seat in the House, without a characteristic of any kind or an enemy
in the world, there, gentle and exquisitely groomed, Dudley Leicester
was a morning or so after his return to town. Standing in front of his
mantelshelf in a not too large dining-room of Curzon Street, he
surveyed his breakfast-table with an air of immense indifference, of
immense solitude, and of immense want of occupation. His shoulder-
blades rubbed the glass front of the clock, his hand from time to time
lightly pulled his moustache, his face was empty, but with an
emptiness of depression. He had nothing in the world to do. Nothing
whatever!
So that turning round to take a note from the frame of the mirror
behind him was with him positively an action of immense
importance. He hadn’t a visit to pay to his tailor; there wouldn’t be at
his club or in the Park anyone that he wanted to be talked to by. The
one bright spot in his day was the P—— exercise that he would take
just before lunch in his bath-room before the open window. This
interested him. This really engrossed him. It engrossed him because
of his docility, his instructor having told him that, unless he paid an
exact attention to each motion of his hands and wrists the exercises
would cause him no benefit whatever. He longed immensely for
physical benefit, for he suffered from constant panics and ideas of ill-
health. He remembered that he had an aunt who had been a
consumptive; therefore he dreaded tuberculosis. He had read in
some paper that the constant string of vehicles passing us in the
streets of London so acted on the optic nerves that general paralysis
was often induced. Therefore sometimes he walked along the streets
with his eyes shut; he instructed his chauffeur to drive him from
place to place only by way of back streets and secluded squares,
and he abandoned the habit of standing in the window of his club,
which overlooked Piccadilly. Because Pauline, by diverting his
thoughts, diverted also these melancholy forebodings, he imagined
that marriage had done him a great deal of good. The letter that he
took from the mantelshelf contained an invitation from the Phyllis
Trevors to dine that night at the Equator Club, and to go afterwards
to the Esmeralda, the front row of whose stalls Phyllis Trevors had
engaged. That matter was one for deep and earnest consideration,
since Dudley Leicester had passed his last three evenings at the
place of entertainment in question, and was beginning to feel himself
surfeited with its particular attractions. Moreover, the Phyllis Trevors
informed him that Etta Stackpole—now Lady Hudson—was to be
one of the party. But, on the other hand, if he didn’t go to the Phyllis
Trevors, where in the world was he to spend his evening?
Promptly upon his return to town, he had despatched letters to
the various more stately houses where he and Pauline were to have
dined—letters excusing himself and his wife on account of the
extreme indisposition of his wife’s mother. He dreaded, in fact, to go
to a dinner alone; he was always afraid of being taken ill between the
soup and the fish; he suffered from an unutterable shyness; he was
intolerably afraid of “making an ass of himself.” He felt safe,
however, as long as Pauline had her eyes on him. But the Phyllis
Trevors’ dinners were much more like what he called “a rag.” If he
felt an uncontrollable impulse to do something absurd—to balance,
for instance, a full glass on the top of his head or to flip drops of wine
at his neighbour’s bare shoulders—nobody would be seriously
perturbed. It was not necessary to do either of these things, but you
might if you wanted to; and all the Phyllis Trevors’ women could be
trusted either to put up the conversation for you, or—which was quite
as good—to flirt prodigiously with their neighbours on the other side.
The turning-point of his deliberations, which lasted exactly three-
quarters of an hour, the actual impulse which sent him out of the
room to the telephone in the hall, came from the remembrance that
Pauline had made him promise not to be an irrational idiot.
He had promised to go out to some dinners, and it was only
dinners of the Phyllis Trevors’ sort that he could bring himself to face.
So that, having telephoned his acceptance to Mrs. Trevor, who
called him the Great Chief Long-in-the-fork, and wanted to know why
his voice sounded like an undertaker’s mute, a comparative
tranquillity reigned in Dudley Leicester’s soul. This tranquillity was
only ended when at the dinner-table he had at his side red-lipped,
deep-voiced, black-haired, large, warm, scented, and utterly
uncontrollable Etta Stackpole. She had three dark red roses in her
hair.
VI
His first action on awakening was always to stretch out his hand
for the letters that his silent man would have placed by his side, and
to glance at the clock on his dressing table to see how many hours
he had slept. And, indeed, next morning his first sensation was one
of bodily well-being and of satisfaction because the clock appeared
to inform him that he had slept for three hours longer than was his
habit. But with a slight feeling of uneasiness he remembered how
late he had been the night before, and stretching out his hand for the
letters, he heard a voice say:
“Are you 4,259 Mayfair?”
He had answered “What?” before he realized that this question
was nothing more than a very vivid recollection. But even when he
had assured himself that it was only a very vivid recollection, he lay
still and discovered that his heart was beating very quickly. And so
afraid was he that the motion of stretching out his arm would bring
again the voice to his ears, that he lay still, his hand stretched along
the counterpane. And suddenly he got up.
He opened one white-painted cupboard, then the other. Finally,
he went to the door of the room and peered out. His man,
expressionless, carrying over his arm a pair of trousers, and in one
hand a white letter crossed with blue, was slowly ascending the
staircase at the end of the corridor.
“You didn’t ask me a question,” Dudley Leicester said, “about
two minutes ago?”
Saunders said: “No, sir, I was answering the door to the
postman. This, sir.” And he held out the registered letter.
It was as if Dudley Leicester recoiled from it. It bore Pauline’s
handwriting, a large, round, negligent scrawl.
“Did he ask our number?” Dudley inquired eagerly; and
Saunders, with as much of surprise as could come into his impassive
face, answered:
“Why, no, sir; he’s the regular man.”
“Our telephone number, I mean,” Dudley Leicester said.
Saunders was by this time in the room, passing through it to the
door of the bath-cabinet.
“As a matter of fact, sir,” he said, “the only thing he asked was
whether Mrs. Leicester’s mother was any better.”
“It’s very odd,” Dudley Leicester answered. And with Saunders
splashing the water in the white bath-cabinet, with a touch of sun
lighting up the two white rooms—in the midst of these homely and
familiar sounds and reflections, fear suddenly seized Dudley
Leicester. His wife’s letter frightened him; when there fell from it a
bracelet, he started as he had never in his life started at a stumble of
his horse. He imagined that it was a sort of symbol, a sending back
of his gifts. And even when he had read her large, sparse words, and
discovered that the curb chain of the bracelet was broken, and
Pauline desired him to take it to the jeweller’s to be repaired—even
then the momentary relief gave way to a host of other fears. For
Dudley Leicester had entered into a world of dread.
II
III
“No,” she commenced, “do not put down this form of obstinacy
to mental aberration. It is rather to be considered as a manifestation
of passion. You say that Kitty is not of a passionate disposition. I
imagine it may prove that she is actually of a disposition passionate
in the extreme. But all her passion is centred in that one desire—the
desire to excite concern. The cure for this is not medical; it is merely
practical. Nerve treatment will not cure it, nor solicitude, but feigned
indifference. You will not touch the spot with dieting; perhaps by ...
But there, I will not explain my methods to you, old Ellida. I
discussed Kitty’s case, as you set it forth, very fully with the chief in
Philadelphia, and between us we arrived at certain conclusions. I
won’t tell you what they were, not because I want to observe a
professional reticence, but simply so that, in case one treatment
fails, you may not be in agonies of disappointment and fear. I haven’t
myself much fear of non-success if things are as you and Dr.
Tressider say. After all, weren’t we both of us as kiddies celebrated
for fits of irrational obstinacy? Don’t you remember how one day you
refused to eat if Calton, the cat, was in the dining-room? And didn’t
you keep that up for days and days and days? Yet you were awfully
fond of Calton.... Yes; I think I can change Kitty for you, but upon one
condition—that you never plead for Robert Grimshaw, that you never
mention his name to me. Quite apart from any other motive of mine
—and you know that I consider mother’s example before anything
else in the world—if he will not make this sacrifice for me he does
not love me. I do not mean to say that you are to forbid him your
house, for I understand he dines with you every other day. His
pleadings I am prepared to deal with, but not yours, for in you they
savour of disrespect for mother. Indeed, disrespect or no disrespect,
I will not have it. If you agree to this, come to our hotel as soon as
you have read it. If you disagree—if you won’t, dear, make me a
solemn promise—leave me three days in which to make a choice out
of the five patients who wish to have me in London, and then come
and see me, bringing Kitty.
“Not a word, you understand—not one single word!
“On that dreadful day when Robert told us that father had died
intestate and that other—I was going to add ‘horror,’ but, since it was
mother’s doing, she did it, and so it must have been right—when he
told us that we were penniless and illegitimate, I saw in a flash my
duty to mother’s memory. I have stuck to it, and I will stick to it.
Robert must give in, or I will never play the part of wife to him.”
She folded her letter into the stamped envelope, and, having
dropped it deliberately into the ship’s letter-box, she rejoined Mrs.