Case Study Forecasting Monthly Sales
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.
While James loves to ski and truly appreciates the mountains and all that they have to offer, he also shares Deena’s dream of retiring to a tropical paradise and enjoying a more relaxed lifestyle on the beach. After some careful analysis of their financial condition, they knew that retirement was many years away. Nevertheless, they were hatching a plan to bring them closer to their dream. They decided to sell The Glass Slipper and open a bed and breakfast on a beautiful beach in
Table 5.13 Monthly Revenue ($1,000s)
MONTH 2011 2012 2013
January 438 444 450
February 420 425 438
March 414 423 434
April 318 331 338
May 306 318 331
June 240 245 254
July 240 255 264
August 216 223 231
September 198 210 224
October 225 233 243
November 270 278 289
December 315 322 335
Mexico. While this would mean that work was still in their future, they could wake up in the morning to the sight of the palm trees blowing in the wind and the waves lapping at the shore. They also knew that hiring the right manager would allow James and Deena the time to begin a semi-retirement in a corner of paradise.
To make this happen, James and Deena would have to sell The Glass Slipper for the right price. The price of the business would be based on the value of the property and equipment as well as projections of future income. A forecast of sales for the next year is needed to help in the determination of the value of the restaurant. Monthly sales for each of the past 3 years are provided in Table 5.13.
Discussion Questions
Prepare a graph of the data. On this same graph, plot a 12-month moving average forecast. Discuss any apparent trend and seasonal patterns.
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.
Use the multiplicative decomposition model and these data 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.
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School of Business
Case Study Analysis Guide
The guidelines presented below have been designed to help the student analyze the cases. They are not, however,
intended to be a rigid format. Each question is intended to bring out information that will be helpful in analyzing and
resolving the case issues. Each case is different, and some parts of the guidelines may not apply in every case
situation. Also, the students should be attentive to the questions for discussion at the end of each case. These
questions should be answered in any complete case analysis. The heart of any case analysis is the recommendations
that are made. Problem/Issue Identification and Analysis/ Evaluation steps should be focused on generating and
defending the most effective set of recommendations possible.
Problem/issue Identification
1.
What are the central facts of the case and the assumptions you are making on the basis of the facts?
2.
What is the major overriding issue in this case? (What major questions/issue does this case address that
merit(s) their/ its study in their course and in connections with the chapter/material you are now covering?
3.
What sub issues or related issues are present in the case that merit consideration and discussion?
Analysis/ Evaluation
4.
Who are the stakeholders in this case, and what are their stakes? What challenges/threats/opportunities are
posed by these stakeholders?
5.
What economic/legal/philanthropic responsibilities does the company have and what exactly are the nature
and extent of these responsibilities?
6.
If the case involves a company’s action, evaluate what the company did or did not do in handling the issues
affecting it.
Recommendations
7.
What recommendations would you make in this case?
8.
If a company’s strategies or actions are involved, should the company have acted the way it did?
9.
What actions should the company take now and why?
10. Include a discussion of alternatives you have considered but decided not to pursue.
11. Mention and discuss any important implementation considerations.
UVI SOB Case Study Analysis Guide –
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