Operations Management Group 7 Section B

Marriott Rooms Forecasting

Question 1: What forecasting technique would you recommend for making Tuesday
afternoon forecast of each day’s demand for the next Saturday through Friday?

Answer:

Associated Forecasting method should be used for forecasting each day’s demand. It is
mentioned in the case that, DOW index for the pickup ratio is calculated by the average pickup
ratio for each day to average pickup ratio for all days. Therefore, adjusted pickup ratio can be
calculated by taking ratio of pickup ratio to Dow Index.

Linear Regression between number of days as independent variable and adjusted pick up ratio as
dependent variable will give a linear equation, the remaining pickup ratios can be calculated by
this equation.

As the regression value is less than 0.05, it is significant. And we can do further analysis for
forecasting.
Operations Management Group 7 Section B

Question 2: What is your forecast for Saturday?

Answer:

The linear equation for adjusted pick up ratio comes as,

Adjusted Pick up ratio = 1.15 – 0.001 * Day of Week

Based on the above formula all the values of pick up ratios, Demand forecast and Tuesday
Booking forecast can be calculated.

Based on these calculations, the forecast for Saturday is, 1666.

Question 3: What will you do about the current request for up to 60 rooms for Saturday?

Answer:

Hamilton hotels have total room capacity of 1877. Also based on the forecasted demand for 22nd
August 1987 Saturday, the room reservation stands at 1666.

Rooms remaining vacant are 211. Therefore Ms. Snow can comfortably accept the bookings for
Tour Company.

Contribution margin for each room, $90

Therefore, total profit contribution by accepting the order, $5400