Forecasting Food and Beverage Sales

Note: The Excel file should include the calculations. For example, how did you calculate the seasonal index? The formulas should be included in the file.

Complete the case problem, Forecasting Food and Beverage Sales located at the end of chapter 17. Upload your original Excel worksheet with a separate tab for each question. Separately, discuss your findings, forecasts, and recommendations. File has to be of type excel. Copying/pasting of tables and/or figures is not permitted, and all tables/figures must be original work completed within the Excel file.

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. shows the value of food and beverage sales ($1000s) for the first three years of operation.

Food and Beverage Sales for the Vintage Restaurant ($1000s)

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 data. Indicate the seasonal indexes for each month, and comment on the high and low seasonal sales months. Do the seasonal indexes make intuitive sense? Discuss.
3. Deseasonalize the time series. Does there appear to be any trend in the deseasonalized time series?
4. Using the time series decomposition method, forecast sales for January through December of the fourth year.
5. Using the dummy variable regression approach, forecast sales for January through December of the fourth year.
6. 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?