Chapter 8: Time Series and Forecasting The CSUSM Restaurant just finished its fourth year of operation

Chapter 8: Time Series and Forecasting The CSUSM Restaurant just finished its fourth year of operation. Through the great efforts of its manager and staff, this restaurant has become one of the most popular and fastest-growing restaurants in the SD County. The manager has recently decided to improve the capacity planning process of the restaurant. To do so, they need to come up with an effective forecasting procedure to predict the monthly sales of foods for up to a year in advance (12 months). Data file CH8 shows the value of food sales ($100s) for the first four years of operation. You, as the new forecasting analyst, have been asked to propose a new forecasting procedure with a summary of your method, forecasts, and recommendations. Include the followings: 3. Using dummy variables for seasonality effects, forecast sales for January through December of the fifth year. 4. Add a trend effect to your forecasting model in (3) and forecast sales for January through December of the fifth year again with the new model. 5. Which model is expected to give more accurate forecasts, (3) or (4)? Calculate MSE for both techniques. 6. Assume that restaurant’s sales in January of the fifth year turn out to be $175,000. What was your forecast (and what is the forecasting error)? How do you explain this error to the manager?