CBA 390 (H/R) Fall 2010
Exam I Problem – Take Home
Name______________________________
Forecasting Problem
1. JAX State Flooring Company is trying to select a forecasting model to determine the number of hardwood
flooring jobs the company will contract each month. A relationship is thought to exist between the demand for
flooring and the number of building permits issued some months prior to the demand. Given below are the
number of building permits issued and the number of flooring jobs in a series of months
Month
1
2
3
4
5
6
7
8
9
a.
b.
c.
Number of Hardwood
Flooring Jobs
50
49
51
56
61
63
68
69
70
Building
Permits Issued
76
82
81
86
95
107
117
125
118
Compute the coefficient of linear correlation between demand for floor installation in a one-month
period and the number of building permits issued one month prior to that period (one-month lag
model).
Compute the correlation coefficient for a two-month lag model.
Using the best of your two models, forecast the demand for floor installation following a month in
which 110 building permits were issued.