Hi Guys Essay
1. Describe three different forecasting applications at Hard Rock. Name three other areas in which you think Hard Rock could use forecasting models.
Hard rock café divide the forecast in long term methods where the expectations are to establish a better capacity plan and short term methods where they look for good contracts with suppliers for leather goods (clothes etc.) and definately to be more negotiable with the suppliers of food products. Also hard rock café pays attention to potencial revenues using pricing and costing information of every café. Short term of sales forecasts are calculated each month by every established site.
Forecasting models could be …show more content…
Using that method the Hard rock café expects from the local managers to maximize their present and future results. That means annual bonuses for these local Managers and even more benefits for the whole company. The basic concept of the annual bonus consider the economical data of the last 3 years:
• Year before: 40% • 2 years before: 40% • 3 Years before: 20%
The trick is that local managers has to be continuous efficient which means to have always better results so they can get the bonuses. If something goes wrong like negative results or just less sales than the other year, they will be revised by the headquarter and may will not get the entire bonus.
4. Name several variables besides those mentioned in the case that could be used as good predictors of daily sales in each cafe.
Variables mentioned in the case:
- prior years sales for that day 40/40/20 -> weight of data information (last year: 40 %, two years ago: 40 %, three years ago: 20 %) - adding information from local Chamber of Commerce or Tourist Board on upcoming events (sport events, major conventions, concerts)