Question

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. Since opening her restaurant, Karen has sought to establish a reputation for the 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 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. Datafile: Vintage shows the value of food and beverage sales ($1000s) for the first three years of operation.

22 32 78 1 140-52 110 130 52 200 193 93 140 57 61 22三,, 009 210 160-125 63499456236385601 247 12345) 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6

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. Using the dummy variable regression approach, forecast sales for January through December of the fourth year.
2. 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 your forecast and the actual sales value. What can you do to resolve her uncertainty in the forecasting procedure?

Answer 1

SOLUTION

oD 35 20 25 30 10 months_starting_with_1st_year_january_as_1

it can be seen from the data that there is a cyclical fluctuation in each year. Sales is very low in the month of august-september and it becomes higher in the month of october to december rapidly.

Aprart from the cyclical fluctuation there has a trend of increase in sale with years. Trend is upward slight