Posted: October 29th, 2022

ISDS Business Analytics II Syllabus: Case Problem

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Case Problem: 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 those three
years, Karen sought to establish a reputation for the restaurant as a high­quality dining
establishment that specializes in fresh seafood. Through the efforts of Karen and her staff, her
restaurant has become one of the best and fastest­growing 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. The
following table shows the value of food and beverage sales ($1,000s) for the first three years
of operation:
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
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Month
First
Year
Second
Year
Third
Year
August 152 161 174
September 110 122 126
October 130 130 148
November 152 167 173
December 206 230 235
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.
How would you explain this model to Karen?
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 about the
forecasting procedure?

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http://ng.cengage.com/static/nb/ui/index.html?nbId=485763&nbNodeId=171858109&eISBN=9781337253901#!&parentId=171858158 1/2 Case Study: Predicting Food and Beverage Sales

The Vintage Restaurant, which is located on Captiva Island in Fort Myers, Florida, is owned and run by

Payne, Karen The restaurant has just finished its third year in business. During those three years,

Karen worked for years to create the restaurant’s image as a high­quality dining establishment.

a restaurant that specialized in fresh seafood Karen and her staff’s efforts resulted in her

The restaurant has grown to be one of the greatest and fastest­growing 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. The

following table shows the value of food and beverage sales

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