QUA 307 Business Forecasting

QUA 307 Business Forecasting
Overview
Time series analysis and forecasting are two essential elements encountered in many applications arising in business areas such as accounting, economics, banking, finance and management. The business world is inundated with time series information on business sales, share prices, unemployment, exchange rates, etc. Graduates, who can utilise such available information to predict the “future”, thus assisting management in decision making, are in strong demand by many employers. Because of good employment prospects, there is considerable interest among students in business faculties in many universities, to learn about time series analysis and forecasting. This unit is designed to equip students with the necessary skills to handle time series data with confidence. In particular, students will be taught the formal procedures of identifying and understanding characteristics of time series data in accounting, economics, banking, finance and management, and the skills for developing and analysing models for forecasting time series data. Furthermore they will encounter “real-world” applications for modelling and evaluating forecasts upon which decision-making would depend. This unit would also assist in opening up excellent career paths and specialised employment areas to the more able students who are particularly strong in mathematics and statistics.
Objectives
On successful completion of this subject, students will be able to: demonstrate a solid understanding of the use of basic tools of forecasting and basic time series analysis techniques; demonstrate a good understanding of moving average and exponential smoothing forecasting techniques as well as their ability to forecast real economic, business and financial time series by moving average and exponential smoothing techniques using Excel; demonstrate a good understanding of the Box-Jenkins method of forecasting and apply their skills and knowledge to forecast real economic, business and financial time series by the Box-Jenkins method using SPSS; demonstrate their ability to analyse time series in the business environment using the appropriate methods with a high level of confidence and apply their skills in interpreting computer output and report writing; demonstrate a basic understanding of a number of the more advanced topics of time series forecasting.
Synopsis
Introduction to forecasting (its importance, usage and problems) – Forecasting methods: moving averaging methods – exponential smoothing methods (simple, double and triple) – ARMA,ARIMA models for stationary and nonstationary time series including estimation of parameters of the model, diagnostic checking and use of the model in forecasting time series. (Suitable software packages are used) Prerequisite QUA 207

Syllabus
• Introduction: The Forecasting Perspective
• Basic forecasting tools
• Review of basic time series and forecasting techniques
• Averaging and exponential smoothing forecasting methods
• Box-Jenkins method of forecasting
• Time series regression
• Introduction to advanced forecasting models
Throughout there will be applications to time series from the accounting, economics, and banking, finance and management areas. Excel and SPSS software will be used.
LEARNING OUTCOMES
The learning outcomes of this unit are:
1. To gain an understanding of the need for, and uses of, forecasting in a business context
2. To gain an understanding of simple quantitative forecasting techniques used in business
3. To learn the application of a number of forecasting techniques using EXCEL and other statistical programs such as Minitab
4. To gain an understanding of qualitative forecasting techniques in a business environment.
Prerequisites
• QUA 207 Data Analysis in Business
Prescribed Text
• Hanke, John E & Wichern, Dean W, 2009. Business Forecasting, (International Edition) Prentice Hall, (9th Edition)
• Makridas, S., Wheelwright, C. and Hyndman, R.J., Forecasting: Methods and Applications, 3rd edition; Wiley 1998.
Course Instructor
Associate Professor Dr Mohammad Nurul Azam
Room S274
Phone: 14674991
Mobile: 0564850692

Consultation Times
• Consultation time with Dr Mohammad Nurul Azam: Saturday 9am to 10am; room S274, 2nd floor.
• You are encouraged to seek help at a time that is convenient to you from a course teacher teaching on this unit during their regular consultation hours. In special circumstances, an appointment may be made outside regular consultation hours.
Course teacher will not conduct any consultations by email. You may, however, phone course teacher during their consultation hours.
• Students experiencing significant difficulties with any topic in the unit must seek assistance immediately.

CLASSES
• Number and length of classes: 3 hours face-to-face teaching per week, consisting of 1 x 2 hour lecture and 1 x 1 hour tutorial.
• Once the groups are formed, students cannot change their classes.
• Attendance will be taken in class.
• Medical certificates must be provided if you are not able to attend a class without incurring a penalty.
• Students are expected to arrive on time, and not to leave until the class ends.

Additional readings
You do not need to buy these books. Occasionally, handouts thereof might be distributed in class.
TECHNOLOGY USED AND REQUIRED
• Students are required to learn how to use spreadsheet and MNITAB 16.
GRADUATE CAPABILITIES
BBA graduates are expected to know the following 7 discipline specific knowledge and skills upon graduation. This unit contributes to this learning by helping student develop capability number 7 below (italicised).
1. An understanding of the internal component parts of a business organisation and their interrelationships
2. Recognising all the elements that comprise an organisation’s environment and understanding how the organisation interacts with them
3. An understanding of the role of the organisation in promoting and providing a sustainable natural environment
4. An understanding of the contribution of marketing in an organisation’s interactions with its environment
5. An understanding of accounting as a tool for describing an aspect of an organisation’s operations and its role in monitoring and controlling activity
6. An understanding of law as an element of the organisation’s environment and a basis for a socially responsible organisation’s behaviour
7. An ability to develop strategy while understanding its role in defining an organisation and progressing it toward a desired competitive position
In addition to the discipline-based learning objectives, all academic programs at Macquarie seek to develop the capabilities the University's graduates will need to develop to address the challenges, and to be effective, engaged participants in their world.
This unit contributes to this learning by helping student develop generic skills number
1, 2 and 7 below (italicised).
1. Critical, Analytical and Integrative Thinking
2. Problem Solving and Research Capability
3. Creative and Innovative
4. Effective Communication
5. Engaged and Ethical Local and Global citizens
6. Socially and Environmentally Active and Responsible
7. Capable of Professional and Personal Judgement and Initiative
8. Commitment to Continuous Learning
TEACHING AND LEARNING STRATEGY
This unit is lecture- and tutorial-based. Typically, the class-time structure will be like this:

During lectures, Business Forecasting theory and concepts will be discussed. We will establish links between theory and your personal knowledge in an business strategic planning setting during class discussions.
During tutorials, students are required to work on some tasks of business forecasting solutions using several models and techniques. Student participation and meaningful contributions are essential to understand business forecasting concepts and calculations.
The lecture notes will be posted on website on a weekly basis.

For your own convenience it is recommended to print hardcopies of the respective notes before coming to class. The recording (video or tape) of lectures or tutorials is not permitted.
If you miss a class/tutorial, ask a colleague for their notes. The topics to be covered each week are as follows:

Schedule of Assessment Tasks for Students During the Semester

Assessment Assessment task (eg. essay, test, group project, examination etc.) Week due Proportion of Final Assessment
1 First midterm exam 4th 10%
2 Second midterm exam 8th 20%
2 third midterm exam 11th 20%
3 Final exam 16th 40%
4 Participation and duties Weekly 10%

Course Materials