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Case Managing Ashland Multicomm Services

Part I.The Ashland MultiComm Services (AMS) marketing department wants to increase subscriptions for its 3-For-All telephone, cable, and Internet combined service. To ensure that as many trial subscriptions to the 3-For-All service as possible are converted to regular subscriptions, the marketing department works closely with the customer support department to accomplish a smooth initial process for the trial subscription customers. To assist in this effort, the marketing department needs to accurately forecast the monthly total of new regular subscriptions.

A team consisting of managers from the marketing and customer support departments was convened to develop a better method of forecasting new subscriptions. Previously, after examining new subscription data for the prior three months, a group of three managers would develop a subjective forecast of the number of new subscriptions.

Livia Salvador, who was recently hired by the company to provide expertise in quantitative forecasting methods, suggested that the department look for factors that might help in predicting new subscriptions.

Members of the team found that the forecasts in the past year had been particularly inaccurate because in some months, much more time was spent on telemarketing than in other months. Livia collected data (stored in AMS13) for the number of new subscriptions and hours spent on telemarketing for each month for the past two years.

AMS13

Required:

1. What criticism can you make concerning the method of forecasting that involved taking the new subscriptions data for the prior three months as the basis for future projections?

2. What factors other than number of telemarketing hours spent might be useful in predicting the number of new subscriptions? Explain.

3. a. Analyze the data and develop a regression model to predict the number of new subscriptions for a month, based on the number of hours spent on telemarketing for new subscriptions.

b. If you expect to spend 1,200 hours on telemarketing per month, estimate the number of new subscriptions for the month. Indicate the assumptions on which this prediction is based. Do you think these assumptions are valid? Explain.

c. What would be the danger of predicting the number of new subscriptions for a month in which 2,000 hours were spent on telemarketing?

Part II.In its continuing study of the 3-For-All subscriptionsolicitation process, a marketing department team wants totest the effects of two types of structured sales presentations(personal formal and personal informal) and the number ofhours spent on telemarketing on the number of newsubscriptions. The staff has recorded these data in the file AMS14for the past 24 weeks.

Required:

Analyze these data and develop a multiple regressionmodel to predict the number of new subscriptionsfor a week, based on the number of hours spent ontelemarketing and the sales presentation type.

Write areport, giving detailed findings concerning the regressionmodel used.

Part III.As part of the continuing strategic initiative to increase subscribersto the 3-For-All cable/phone/Internet services, themarketing department is closely monitoring the number ofsubscribers. To help do so, forecasts are to be developed forthe number of subscribers in the future. To accomplish thistask, the number of subscribers for the most recent 24-monthperiod has been determined and is stored in AMS16.

Required:

1. Analyze these data and develop a model to forecast thenumber of subscribers. Present your findings in a reportthat includes the assumptions of the model and its limitations.Forecast the number of subscribers for the next fourmonths.

2. Would you be willing to use the model developed to forecastthe number of subscribers one year into the future?Explain.

3. Compare the trend in the number of subscribers to thenumber of new subscribers per month stored in AMS13. What explanation can you provide for any differences?

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