C Mon Back Restaurant Case Study Essay

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Year-Four Forecast for C’Mon Back Restaurant The provided past three years of sales data has been examined and analyzed. A sales forecast for year- four has been prepared and is included in this report. The following chart illustrates the sales over the past three years. The above time series plot indicates that there is a seasonality aspect to the sales throughout the year at C’mon Back Restaurant. This corresponds with the data provided regarding monthly sales. By using regression and the seasonality index for each month, we can attempt to forecast future sales based on sales performance from the past. The total sales for the past 3 years in $1000s are as follows • Year 1: $2,106 • Year 2: $2,250 • Year 3: $2,399 A regression analysis…show more content…
An index number < 1 for the month indicates that month’s sales are generally lower than the average. The result is the following: Seas. Index 1.398075 1.293264 1.321688 1.023242 1.042783 0.797631 0.831384 0.865137 0.635973 0.724796 0.874019 1.192006 Jan Feb March April May June July Aug Sept Oct Nov Dec Year 4 Monthly Forecast Based on the seasonality factor for each month, the forecasted year-four monthly sales rounded to the dollar (in $1000s) are: Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Year 4 Forecast $296 $274 $280 $217 $221 $169 $176 $183 $135 $154 $185 $253 ***Sales in $1000’s and rounded to the nearest dollar for illustration purposes Forecasted sales for January of year four were calculated to be $296,469.70. The fact that actual sales equated to $295,000 indicates a forecast error of -$1,469.70. This difference is rather minimal and equates to an error of .498%. A forecast is an estimation of what to expect and is not exact. You should not be alarmed by this error, especially with it being so minimal. This forecast is a strong indication of the performance of your restaurant in the months to come. This forecast provided should provide you with a strong basis to plan for purchasing inventory and expected profit to be
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