Discussion Questions* 1. Describe three different forecasting applications at Hard Rock. Name three other areas in which you think Hard Rock could use forecasting models. 2. What is the role of the POS system in forecasting at Hard Rock? 3. Justify the use of the weighting system used for evaluating managers for annual bonuses. 4. Name several variables besides those mentioned in the case that could be used as good predictors of daily sales in each cafe. 5. At Hard Rock's Moscow restaurant, the manager is trying to evaluate how a new advertising campaign affects guest counts. Using data for the past 10 months (see the table), develop a least-squares regression relationship and then forecast the expected guest count when advertising is $65,000. MONTH HARD ROCK'S MOSCOW CAFE 123456789 910 Guest count (in thousands) 21 24 27 32 29: 37 43 43 54 66 Advertising (in $ thousand) 14 17 25 25 35 35 45 50 60 60 Forecasting at Hard Rock Cafe Watch: Forecasting at Hard Rock Cafe # Foresting With the growth of Hard Rock Cafe-from one pub in London in 1971 to more than 185 restaurants in 74 countries today -came a corporatewide demand for better forecasting. Hard Rock uses long-range forecasting in setting a capacity plan and intermediate-term forecasting for locking in contracts for leather goods (used in jackets) and for such food items as beef, chicken, and pork. Its short-term sales forecasts are conducted each month, by cafe, and then aggregated for a headquarters view. The heart of the sales forecasting system is the point-of-sale (POS) system, which, in effect, captures transaction data on nearly every person who walks through a cafe's door. The sale of each entrée represents one customer; the entrée sales data are transmitted daily to the Orlando corporate headquarters' database. There, the financial team, headed by Todd Lindsey, begins the forecast process. Lindsey forecasts monthly guest counts, retail sales, banquet sales, and concert sales (if applicable) at each cafe. The general managers of individual cafes tap into the same database to prepare a daily forecast for their sites. A cafe manager pulls up prior years' sales for that day, adding information from the local Chamber of Commerce or Tourist Board on upcoming events such as a major convention, sporting event, or concert in the city