Time Series Analysis and Forecasting: Case Problem 1: Forecasting Food and Bever

Question

Time Series Analysis and Forecasting: Case Problem 1: Forecasting Food and Beverage Sales                 

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.                 

                

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.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?

TABLE 6.17 FOOD AND BEVERAGE SALES FOR THE VINTAGE RESTAURANT ($1000s)                              Month                              First Year                              Second Year                              Third Year                                                              January                                                              242                                                              263                                                              282                                                              February                                                              235                                                              238                                                              255                                     March                                                              232                                                              247                                                              265                                                              April                                                              178                                                              193                                                              205                                                              May                                                              184                                                              193                                                              210                                                              June                                                              140                                                              149                                                              160                                                              July                                                              145                                                              157                                                              166                                                              August                                                              152                                                              161                                                              174                                                              September                                                              110                                                              122                                                              126                                                              October                                                              130                                                              130                                                              148                                                              November                                                              152                                                              167                                                              173                                                              December                                                              206                                                              230                                                              235                             

Explanation / Answer

Time Series Analysis and Forecasting: Case Problem 1: Forecasting Food and Bever

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.