The Glass Slipper Restaurant
The Glass Slipper Restaurant
For years The Glass Slipper restaurant has operated in a resort community near a popular ski area of New Mexico. The restaurant is busiest during the first 3 months of the year, when the ski slopes are crowded and tourists flock to the area. When James and Deena Weltee built The Glass Slipper, they had a vision of the ultimate dining experience. As the view of surrounding mountains was breathtaking, a high priority was placed on having large windows and providing a spectacular view from anywhere inside the restaurant. Special attention was also given to the lighting, colors, and overall ambiance, resulting in a truly magnificent experience for all who came to enjoy gourmet dining. Since its opening, The Glass Slipper has developed and maintained a reputation as one of the "must visit" places in that region of New Mexico.
1. Prepare a graph of the data. On this same graph, plot a 12-month moving average forecast. Discuss any apparent trend and seasonal patterns.
2. Use regression to develop a trend line that could be used to forecast monthly sales for the next year. Is the slope of this line consistent with what you observed in question 1? If not, discuss a possible explanation.
3. Use the multiplicative decomposition model on these data. Use this model to forecast sales for each month of the next year. Discuss why the slope of the trend equation with this model is so different from that of the trend equation in question 2.
SOLUTION
1.
The scatter plot of the data shows a definite seasonal pattern with higher sales in the winter months and lower sales in the summer and fall months. There is a slight upward trend as evidenced by the fact that for each month, the sales increased from the first year to the second, and again form the second year to the third.
2. A trend line based on the raw data is found to be:
Y = 330.889 – 1.162X
The slope of the trend line is negative which would indicate that sales are declining over time.
For years The Glass Slipper restaurant has operated in a resort community near a popular ski area of New Mexico. The restaurant is busiest during the first 3 months of the year, when the ski slopes are crowded and tourists flock to the area. When James and Deena Weltee built The Glass Slipper, they had a vision of the ultimate dining experience. As the view of surrounding mountains was breathtaking, a high priority was placed on having large windows and providing a spectacular view from anywhere inside the restaurant. Special attention was also given to the lighting, colors, and overall ambiance, resulting in a truly magnificent experience for all who came to enjoy gourmet dining. Since its opening, The Glass Slipper has developed and maintained a reputation as one of the "must visit" places in that region of New Mexico.
1. Prepare a graph of the data. On this same graph, plot a 12-month moving average forecast. Discuss any apparent trend and seasonal patterns.
2. Use regression to develop a trend line that could be used to forecast monthly sales for the next year. Is the slope of this line consistent with what you observed in question 1? If not, discuss a possible explanation.
3. Use the multiplicative decomposition model on these data. Use this model to forecast sales for each month of the next year. Discuss why the slope of the trend equation with this model is so different from that of the trend equation in question 2.
SOLUTION
1.
The scatter plot of the data shows a definite seasonal pattern with higher sales in the winter months and lower sales in the summer and fall months. There is a slight upward trend as evidenced by the fact that for each month, the sales increased from the first year to the second, and again form the second year to the third.
2. A trend line based on the raw data is found to be:
Y = 330.889 – 1.162X
The slope of the trend line is negative which would indicate that sales are declining over time.