Business Finance Homework Help

Penguin Images Services is a US-based healthcare service provider, specializing in state-of-the-art medical imaging. The imaging services they offer include MRI, MR Angiography (MRA), CT Scan, 3D Imaging, X-ray and Ultrasound. Their business model is based on low cost but responsive service. They attempt to achieve this goal by maintaining a group of radiologists who are paid to evaluate images and to be available during various periods when services are expected. That is, when on duty, each radiologist is paid a minimum amount even when service is not required. Labor costs are minimized by hiring radiologists located in certain high quality but lower cost locations, mainly India.

The effectiveness of Penguin’s service is affected a great deal by their ability to forecast demand. Penguin does not require that patients make an appointment, because most patients were referred by their physician. These patients necessitated service on short notice.

Penguin’s location in Bainston, Rhode Island, is opened for customers Monday through Friday (0800-1700) and Saturday (0800-1200). At this location, a short-term increase in demand for MRI image evaluation has occurred. This growth was caused by the closing of the other major imaging service provider in Bainston. The increase in demand is expected to continue over the next several weeks. Historical demand (number of images by day) is shown below and included on the accompanying Excel file:

Create an Excel spreadsheet that fits a time series model (with level, linear trend, and seasonal components) for purposes of forecasting daily demand at Penguin. Include calculations necessary to determine forecast margin of uncertainty. Assume that forecast errors are normally distributed.

Use your time series model to forecast future daily demand for the next three weeks (April 9-28), including a margin of uncertainty for each day’s forecast. Include a graph that shows information regarding the forecast.