Tourism forecasting UE Past Papers Questions.

What do you understand by the term ‘multicollinearity’?

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Explain briefly at least 2 strengths and 2 limitations of each of the following tourism forecasting models.

1. Regression models
2. Delphi technique.

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Various models have been used for tourism forecasting . Of the models, ‘autoregressive integrated moving average’ (ARIMA) models have been extensively utilized in tourism forecasting. To test your understanding of ARIMA models, you are required to answer the following questions about ARIMA.

1. Briefly explain how are the models used in tourism forecasting?
2. Discuss briefly the strengths and limitations of these models?

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Explain briefly how the exponential smoothing method of tourism forecasting works.

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The following table indicates tourism demand for country Y from year 1 to year 11. Study the table and use the ‘exponential smoothing’ method to forecast tourism demand for country Y starting from year 3 through 12. Assume year 1 increased by 20 per cent. The exponential smoothing formula is given as

Where

=Last period`s forecast

=Last period`s actual demand and

=a smoothing coefficient whose value is between 0 and 1.

Hint:  Use   value of 0.1

Note : present your answer in tabular form as shown in the table below.

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