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Intelligent System to Support Judgmental Business Forecasting: the Case of Estimating Hotel Room Demand

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Computational Intelligence in Economics and Finance

Part of the book series: Advanced Information Processing ((AIP))

Abstract

Forecasting is an instrumental tool for strategic decision- making in any business activity. Good forecasts can reduce the uncertainty about the future and, hence, help managers make better decisions. Virtually all statistical forecasting techniques depend on the continuity of historical data and time series and may not predict a discontinuous change in the business environment. Often times, this discontinuity is known to managers who then must rely on their judgment to make forecast adjustments. In this paper, we discuss the role of judgmental forecasting and take the problem of estimating future hotel room demand as a practical business application. Next, we propose IS-JFK: an intelligent system to support judgmental forecasting and knowledge of managers. To account for vagueness in the knowledge elicited from managers and the approximate nature of their reasoning, the system is built around fuzzy IF-THEN rules and uses fuzzy logic for decision inference. ISJFK supports two methods for forecast adjustments: 1) a direct approach and 2) an approach based on fuzzy intervention analysis. Actual data from a hotel property are used in some case-scenario simulations to illustrate the merits of the intelligent support system.

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Author information

Authors and Affiliations

  1. Engineering Department, University of Texas-Pan American, Edinburg, TX, 78539, USA

    Mounir Ben Ghalia

  2. Electrical and Computer Engineering Department, Duke University, Durham, NC, 27708, USA

    Paul P. Wang

Authors
  1. Mounir Ben Ghalia
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  2. Paul P. Wang
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Editor information

Editors and Affiliations

  1. AI-ECON Research Center Department of Economics, National Chengchi University, 11623, Taipei, Taiwan

    Shu-Heng Chen

  2. Department of Electrical and Computer Science, Duke University, P.O. 90291, 27708-0291, Durham, NC, USA

    Paul P. Wang

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© 2004 Springer-Verlag Berlin Heidelberg

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Ghalia, M.B., Wang, P.P. (2004). Intelligent System to Support Judgmental Business Forecasting: the Case of Estimating Hotel Room Demand. In: Chen, SH., Wang, P.P. (eds) Computational Intelligence in Economics and Finance. Advanced Information Processing. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-06373-6_2

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  • DOI: https://doi.org/10.1007/978-3-662-06373-6_2

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-07902-3

  • Online ISBN: 978-3-662-06373-6

  • eBook Packages: Springer Book Archive

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