Forecasting at Cruise International

In this assignment you will focus on forecasting demand for cruises in different geographical regions. CII is trying to determine which geographical regions have faster growing demand so that they can be sure they have sufficient cruises available in the area. You are to meet with Jean Burkette, Director of Demand Management, at CII corporate.

“Hi, I’m Jean. How are you? I am sure your internship program is keeping you busy. Let me tell you about the forecasting problem I want you to help me with. A primary concern for CII is having enough ships available in each region that it serves. Excess capacity in a given market tends to result in price discounting as a means of filling the ships, thus reducing profits. Insufficient capacity in a region results in customers booking cruises with other cruise line organizations, once again reducing profits. Neither situation is desirable, so we try to forecast demand by region and then examine if we have sufficient capacity scheduled for the region.”

“I need you to develop a forecast for the upcoming cruising season using any method that you believe provides a reliable forecast.”

Assignment Questions for Chapter 8. Develop a forecast of the demand for cruises next season both in aggregate demand for the entire industry and also by different regions. The data collected by Burkette is available at Cruise Data. If Cruise International captures the same share of the market as its share of industry capacity, develop similar forecasts for CII. Present your results in a memo that explains the forecasting technique used and the basis for its selection, and also illustrates the reliability of your forecast. Given your forecast, what additional information would you need to make a recommendation as to how many and which specific ships CII should deploy to the region for next season? • Back to Virtual Company