Business School The Chinese University of Hong Kong

Department of Decision Sciences and Managerial Economics

Business Forecasting
(DSME3030)
2nd Term, 2022 – 2023

Professor: LI Hongyi Office: Room 904, Cheng Yu Tung Building

Phone: 39437796 Email: [email protected]

TA: PENG Jie Office: Room 951, Cheng Yu Tung Building

Phone: 68937220 Email: [email protected]

Class Schedule
January 12, 2023 – April 20, 2023, Thursday 11:30 am - 2:15 pm
Location: CKB 109
Class will meet on the following days:
January 12, 19, February 2, 9, 16, 23, March 2 (1st Midterm Exam), 16, 23, 30, April 6 , 13, 20
(2nd Midterm Exam)

Objectives
This course provides students with principles and methods in forecasting for managerial planning.
Major topics include multiple regression analysis, time series analysis (with emphasis on smoothing
techniques), decomposition methods, Box-Jenkins ARIMA procedures, big data, and text mining, etc.
Applications of the methods to both short-term and long-term forecasting to business, industries, and
national business trends are also emphasized.

Prerequisites: DSME2010/2011 and DSME2020/2021

Expectations of Students
 Students taking this class are expected to have a solid understanding of multiple regression
analysis. (Very important)
 Attend all classes and participate in class discussions.
 Complete all assignments, projects and computer applications independently.
 Use statistical software for forecasting applications.
 Apply the forecasting techniques to real economic and business data.

Textbooks
Keating, Barry and J. Holton Wilson (2019), Forecasting and Predictive Analytics, 7th edition,
McGraw Hill.

References
Bowerman, Bruce L., Richard T. O’Connell and Anne B. Koehler (2005), Forecasting, Time Series,
and Regression, 4th edition, Thomson.
Enders, Walter, (2015), Applied Econometric Time Series, 4th Edition, John Wiley & Sons, Inc.
Ord, Keith and Robert Fildes (2013), Principles of Business Forecasting, 1st edition, Cengage Learning.

Grading Policy
Homework (Including cases and in-class exercises) 20%
1st Midterm exam 35%
* 2nd Midterm exam 45%
Total 100%

Notes:
1. Exams
a. The midterm exams will be closed-book exams.
b. No make-up exams will be considered unless reasonable justification provided.

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Business School The Chinese University of Hong Kong

2. The final grades will be curved.

Grade Descriptors

Grades Grade Description

A Outstanding performance on all learning outcomes.
A- Generally outstanding performance on all (or almost all) learning outcomes.
B Substantial performance on all learning outcomes, OR high performance on some learning
outcomes which compensates for less satisfactory performance on others, resulting in
overall substantial performance.
C Satisfactory performance on the majority of learning outcomes, possibly with a few
weaknesses.
D Barely satisfactory performance on a number of learning outcomes.
F Unsatisfactory performance on a number of learning outcomes, OR failure to meet
specified assessment requirements.

Course Outline
Lecture 1. Introduction (Chapter 1 and Chapter 2)
Lecture 2. Smoothing and Decomposition (Chapter 3 and Chapter 6)
Lecture 3. Trend Models (Chapter 4)
Lecture 4. Multiple Regressions with Time Series Data (Chapter 5)
Lecture 5. Stationary Time Series Models (Chapter 7)
Lecture 6. Big Data (Chapter 8)
Lecture 7. Classification Models (Chapter 9)
Lecture 8. Ensemble Models and Clustering (Chapter 10)
Lecture 9. Text Mining (Chapter 11)

Notes:
1. The course outline is subject to change depending on the progress of class.
2. The sequence of lecture topics may not follow exactly the above outline.

General Reminder
 All homework and exams should be completed independently. Any violation of this policy will
result in a strict “F”.
 All mobile phones, or any other electronic devices, should be turned silent/off in the classroom.
Use of mobile phones during classes will result in an “F” in the final grade.

Honesty in Academic Work

Attention is drawn to University policy and regulations on honesty in academic work, and to the disciplinary
guidelines and procedures applicable to breaches of such policy and regulations. Details may be found at
h ttp ://www.c uhk. edu.hk/po lic y/a cade mic h one s ty/ . With each assignment, students will be required
to submit a statement that they are aware of these policies, regulations, guidelines and procedures.

Office Hours
By appointment