BUSN 688 : Case Problem Forecasting Food and Beverage Sales Time Series Plot
The Vintage Restaurant, on Captiva Island near Fort Myers, Florida, is owned and operated by Karen Payne. The restaurant just completed its third year of operation. During that time, Karen sought to establish a reputation for the restaurant as a high-quality dining establishment that specializes in fresh seafood. Through the efforts of Karen and her staff, her restaurant has become one of the best and fastest-growing restaurants on the island. To better plan for future growth of the restaurant, Karen needs to develop a system that will enable her to forecast food and beverage sales by month for up to one year in advance. Table 6.17 shows the value of food and beverage sales ($1000s) for the first three years of operation. Month Sales
Perform an analysis of the sales data for the Vintage Restaurant. Prepare a report for Karen that summarizes your findings, forecasts, and recommendations. Include the following:
1.A time series plot. Comment on the underlying pattern in the time series.
2.Using the dummy variable approach, forecast sales for January through December of the fourth year. Assume that January sales for the fourth year turn out to be $295,000. What was your forecast error? If this error is large, Karen may be puzzled about the difference between your forecast and the actual sales value. What can you do to resolve her uncertainty in the forecasting procedure?