Question

A manager of a cruise ship requests you to generate a quantitative forecast with a prediction interval for the following;

* The number of sick passengers as a forecast for each of the next ten future cruises. Historical data shows that the number of sick passengers has gradually decreased over time from a high of 25 sick persons on the cruise twenty years ago to just 2 sick persons for the last cruise.

Will you restrict the point forecast or the prediction interval in any way? Explain your answer.

Answer 1

The proposed forecast can be restricted in the way that the forecast must take into consideration any changes in the environmental factors affecting the overall system. There can be factors- both internal and external which could have had considerable influence on the system 20 years ago. However, with time, such factors do change or evolve. The forecasting technique used to assess the value of the last cruise must address such factors before finalizing the forecast.