Hard Rock Café Forecast Case of Study

Hard Rock Café forecast case of study
Natalia Muvdi, Mariana Buitrago, Valentina Mora, Sergio Lopez y Samuel Muvdi
Gestión de Operaciones, Universidad de la Sabana, Chía, Cundinamarca
15 de agosto del 2021
1. Describe three different forecasting applications at Hard Rock. Name three
other areas in which you think Hard Rock could use forecasting models.
The three different forecasting applications at hard rock are divided in long term,
intermediate and short. For the long term, they want to set a capacity plan. The
intermediate plan consists of purchasing contracts for leather goods and for foods like
beef, chicken, and pork. Finally, the short-term use forecasting to schedule and purchase
labor, food, and immediate supplies.
Three other areas that in which Hard rock could use forecasting models should be:
a. The number of visitors in different times like breakfast or lunch.
b. Apply forecasting for each of the elements in the menu.
c. Preference for meals for different kind of public or include seasonal
forecasting in the menu.
2. What is the role of the POS system in forecasting at Hard Rock?
As is described in the case, the POS system or as its stands for the "Point of Sale" is
mainly used to capture the transaction data of every customer that walks through the
doors of Hard Rock Café. Therefore, the information that the Café receive/capture daily
goes directly to the corporate headquarters database in Orlando. With this type of
information, the role of the POS system is basically a data collect of their customers to
know their preferences and habits through statistics, to prepare a better forecast process
and strategy with the information that is provided with the POS system itself.
3. Justify the use of the weighting system used for evaluating managers for annual
bonuses.
The weighted moving average is a forecasting method used to make forecasting more
responsive to changes because more recent periods may be more heavily weighted. The
process to extract the weighted moving average is the sum of the product between the
weight and demand of the period, dividing this by the sum of the periods.
In this case, Hard Rock Café uses the weighted moving average to carry out the
forecasting process considering the previous 3 years, where it distributes the weight of
each year in the following way: the previous year weighs forty percent, the next also
weighs forty percent and the last, that is, the most distant weighs twenty percent, this
allows us to confirm that the process takes larger weights at closer periods.
On the other hand, it is highlighted that Hard Rock uses this process to determine the
objective of the next period, when this is exceeded by the manager, a bonus is granted
because it means that sales increased which is a positive aspect, but if on the contrary
sales are less than the objective, it is necessary to determine and review why the process
yielded this result to improve predictions and behavior in the company, as it can be due
to a bad prediction as well as human resources or marketing processes, when this happens
It is negative for the expenses of the company since an amount of money was invested
that corresponds to unreached profits.
The weighted moving average is carried out in the company to create a better relationship
with each of the managers, as it not only helps to predict sales for a specific period but
also aims to ensure an increase in sales as it provides incentives to those who exceed the
objectives raised by the forecasting method, thus contributing positively to the company
and the workers.
4. Name several variables besides those mentioned in the case that could be used
as good predictors of daily sales in each cafe.
It is not only about focusing on the dishes when one goes up, the others go down or
remain the same and ask for more, but it goes beyond a simple plate. There are several
variables which are the ages of the clients, their sexes and with these data the forecasts
could be seen in another way and help each of the managers more, also if there is any
sporting event depending on the city in which is this one can see an enthusiasm for that
important sporting event for that city helping to generate more innovation and desire to
go. They should not only be sporting events but also cultural events for that city or for
that country making this place something different all the time, that also includes the
time, that is, the seasons which give a great variety to constantly change the menu making
the diner every time I go, I can find something different.
On the other hand, there are also companies where it would be somewhat ingenious since
these places would not only be available for public use but also have a menu and specific
hours for private parties or celebrations and for companies, which would help these places
to be available to any client. be it big or small, always creating new things and attracting
more customers.
5. 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.
Link: https://docs.google.com/spreadsheets/d/1t7N5Kxfn3YFiLiyhEtoq6YrqZiMbsTK6/edi
t?usp=sharing&ouid=113758394888727962813&rtpof=true&sd=true

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Hard Rock Café forecast case of study

Gestión de Operaciones, Universidad de la Sabana, Chía, Cundinamarca

15 de agosto del 2021

1. Describe three different forecasting applications at Hard Rock. Name three

labor, food, and immediate supplies.

a. The number of visitors in different times like breakfast or lunch.

b. Apply forecasting for each of the elements in the menu.

c. Preference for meals for different kind of public or include seasonal

forecasting in the menu.

2. What is the role of the POS system in forecasting at Hard Rock?

that corresponds to unreached profits.

and the workers.

as good predictors of daily sales in each cafe.

the diner every time I go, I can find something different.

guest count when advertising is $65,000.

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