Marriott Rooms Forecasting Harvard Case Solution & Analysis

Question 1
Should we accept the additional reservations?
The additional reservations should be accepted by Snow. Selling out the house for a business hotel would be a real coup and this would enhance the revenues of the company. The cost of denying a room to the customer is high and it would impair the goodwill of the hotel. Therefore, the additional reservations of 60 people should be accepted by the hotel. Furthermore, the analysis of the forecasted pickup ratios, forecasted DOW and the forecasted demand following Week 14, we can see that the actual demand is going to be higher than the capacity of the hotel therefore, the additional reservations for 60 people should be accepted.
Question 2
Which statistic method should we use in order to come up with the valid forecast?
We have used the simple exponential smoothing method to forecast the demand for week 14. We have used a smoothing constant of 0.5. This method has many advantages such as it is easy to understand and apply to time series data. This method produces accurate forecasts for one period ahead because it makes use of the trend projection technique. It is also accurate method because it incorporates the differences between what actually occurred and the actual projections. More significance is given to the recent observations and this results in a more accurate forecast of the data.

Marriott Rooms Forecasting Harvard Case Solution & Analysis

We have applied the 3 days simple moving average method to forecast the pickup ratios and the DOW index for the period of week 14. Using this we have calculated the adjusted pickup ratio and then we have calculated the forecasted pickup ratio and DOW index. Using the forecasted pickup ratios, we have multiplied it by the Tuesday bookings to compute the forecasted demand which is shown in the table below:
HOTEL ROOM FORECASTING
Week Dow Indicator Tuesday Bookings Pickup Ratio Dow Index Adjusted Pickup Ratio
1 1 - 0.972 0.865 1.124
2 - 1.007 0.911 1.105
3 - 1.192 0.973 1.225
4 - 1.31 1.013 1.293
5 - 1.499 1.068 1.404
6 - 1.318 1.123 1.174
7 - 1.144 1.049 1.091
2 1 - 0.912 0.865 1.054
2 - 0.94 0.911 1.032
3 - 1.065 0.973 1.095
4 - 1.014 1.013 1.001
5 - 1.117 1.068 1.046
6 - 1.22 1.123 1.086
7 - 1.188 1.049 1.133
3 1 - 1.056 0.865 1.221
2 - 1.131 0.911 1.241
3 - 1.21 0.973 1.244
4 - 1.293 1.013 1.276
5 - 1.478 1.068 1.384
6 - 1.494 1.123 1.330
7 - 1.117 1.049 1.065
4 1 - 0.952 0.865 1.101
2 - 0.907 0.911 0.996
3 - 0.918 0.973 0.943

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