The Walt Disney Company:
Time Series Forecasting
The Walt Disney Company is known to be the worlds most admired entertainment company. It has recently decided to open up a new Pixar themed park in California. In order to do so, the company will need to assure their bank that it is capable of paying back loans in the future as well as reassuring owners and investors that they will not lose any money in the future. In order for Walt Disney to carry on with their plan, they need to be able to show their banks, owners and investors a model to predict future values based on historical values. How lucky for them that a group of highly trained time series forecasters are available for a top-dollar price! The group of analysts will decide on a few methods to enter in their data and then determine which technique works best with the corresponding data. They will base their decision by determining which method has the least amount of error as well as the most dependability. With a company this large and a lot at stake, it is crucial for the results to be as efficient as possible so that the proper decisions can be made to follow. The ingenious analysts will use historical data from the past eight years (31 quarters) to determine the revenue of the thirty-second quarter. The forecasting will help banks determine whether it is a good idea to support Walt Disney with a loan. In addition, forecasting for the thirty-second quarter will give important information about the direction in which the company is headed so that owners and investors can prepare and make plans.
The company’s historical data involving revenue was collected from the past eight years, a total of thirty-one quarters, from the years 2005 to 2012. Our dependent variable (the variable being predicted) is revenue and our independent variable (used to assess the value of the dependent variable) is time. Revenue was measured in millions...
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