Business Operation Management

Describe three different forecasting applications at Hard Rock. Name three other areas in

which you think Hard Rock could use forecasting models.

Hard Rock makes use of long-term forecasts to set up a capability plan. The company's

momentary forecast to impervious contracts for leather-based items (used in jackets) and for

meals such as beef, chicken, and pork. Their temporary income forecasts are made each month at

a café and then delivered up for a headquarters view. Other areas the place forecasts can be

utilized are: in the lengthy term, the range of traffic in special time zones (breakfast, lunch or

dinner), in the medium term, the meals desire for a greater pick public, vegetarians (healthier

food) and, in the quick term, Study of merchandise for serving at the tables (napkins, cutlery,

etc.).

Other viable areas of application, to encompass seasonal forecasting in the menu

planning, to predict consumer conduct changes, to follow forecasting to each single issue of the

menu; They ought to forecast booming areas to construct a Hard Rock Cafe there.

Forecasting of patron pride in contrast with actual records from client pleasure surveys.

Name several variables besides those mentioned in the case that could be used as good

predictors of daily sales in each cafe.

Some of the variables that could as good predictors of the daily sales of each coffee is to

compare the sales volume per square meter for similar stores in similar locations and similar

sizes, focus on household income, number of households that need to live within a mile, how

much money will you spend on these items annually, and what percentage of likes will you get

compared to your competitors.

 At Hard Rock’s Moscow restaurant, the manager is trying to evaluate how a new

advertising campaign affects guest counts. Using data for the past 10 months (see the

table), develop a least-squares regression relationship and then forecast the expected guest

count when advertising is $65,000.

We consider there is a relation between the money invested in advertising and the number

of guests we get to our Hard Rock Café. Therefore, we could define the following variables:

y: Number of guests coming to our Hard Rock Café in Persons (dependent variable).

x: Investment in advertising in k$ (independent variable).

If we represent number of guests (Guest count) vs advertising, we will obtain the

following graphic:

Now it is time to determine an equation that defines the relation between the dependent

variable and the independent variable. In Excel we only need to click on "Add trend line" and

choose the linear regression type.

 

The equation can be interpreted as: Guest Count (kPersons)= 0,9236* Advertising (k$) +

1,,7948. If we invest 65.000 $ we would have the following number of guests:

Guest Count (kPersons) = 0,9236*65+1,7948= 61,829 kPersons = 61.829 persons.

The R square value (0,8733) shows what percentage of the monthly variation in guest

count (y) is explained by the monthly variation in advertising investment. We can state that our

linear relationship explains 87,33% of the variation in monthly guest count.

Reference

Heizer, Render, & Munson. (2017). Principles of operations management, sustainability

and supply chain management. (10th Edition). London: Pearson.

 Burrow, Kleindl, & Becraft (2017). Business management. (14th ed). MA: Cengage

learning.