TABLE 17.25 FOOD AND BEVERAGE SALES FOR THE VINTAGE RESTAURANT ($1000s) Month First Year Second Year Third Year January 242 235 232 263 238 247 282 255 265 205 February March 193 April Мay June 178 184 193 210 140 149 157 160 July August September Otober 145 152 166 174 126 161 110 122 130 130 148 November 152 167 173 December 206 230 235

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Forecasting Food and Beverage Sales

The Vintage Restaurant, on Captiva Island near Fort Myers, Florida, is O\vned and operated by Karen Payne. The restaurant just completed its third year of operation. Since opening her restaurant, Karen has sought to establish a reputation for Vintage 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 the 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 17.25 shows the value of food and beverage sales ($1000s) for the first three years of operation.

Managerial Report

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. An analysis of the seasonality of the da Indicates the seasonal indexes for each month and comment on the high and low seasonal sales months. Do the seasonal indexes make intuitive sense? Discuss.
    1. Deseasonalize the time series. Does there appear to be any trend in the deseasonalized time series?
    2. Using the time series decomposition method, forecast sales for January through December of the fourth year.
    3. Using the dummy variable regression approach, forecast sales for January through December of the fourth year.
    4. Provide summary tables of your calculations and any graphs in the appendix of your report.

    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 even your forecast and the actual sales value. What can you do to resolve her uncertainty in the forecasting procedure?

TABLE 17.25 FOOD AND BEVERAGE SALES FOR THE VINTAGE
RESTAURANT ($1000s)
Month
First Year
Second Year
Third Year
January
242
235
232
263
238
247
282
255
265
205
February
March
193
April
Мay
June
178
184
193
210
140
149
157
160
July
August
September
Otober
145
152
166
174
126
161
110
122
130
130
148
November
152
167
173
December
206
230
235
Transcribed Image Text:TABLE 17.25 FOOD AND BEVERAGE SALES FOR THE VINTAGE RESTAURANT ($1000s) Month First Year Second Year Third Year January 242 235 232 263 238 247 282 255 265 205 February March 193 April Мay June 178 184 193 210 140 149 157 160 July August September Otober 145 152 166 174 126 161 110 122 130 130 148 November 152 167 173 December 206 230 235
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