Hard Rock Cafe

Forecasting at Hard Rock Café

Fabiola Saucedo

Case 1

1. Hard Rock café the long term, intermediate term, and short term to forecast different aspects of demand and sales and what is needed at each of its restaurants. The forecasters use long term forecasting to determine bonuses for managers at each of these restaurants by using the moving average forecast. The moving average is calculated on a 3 year mark, and it is on a 40, 40, 20 weight. They take the most recent year, the previous year and the year before that to determine whether or not mangers did their job and made sales go up and progress. The other forecasting method they use which is considered short term is the POS or point of sale method to track every person who walks into the restaurant and dines, the sales tracked by the POS system determines how much a customer consumes and helps forecast the monthly amount of guests and sales. The last forecasting method Hard Rock Café uses is the regression analysis method to make changes in their menus and to determine how a change in the price of an item affects the demand for other items. Three other areas where Hard Rock Café could use forecasting models would be in the type of entertainment they use and how effective it is to get consumers to walk into the café, another one could be introducing new items on the menu and new themes.

2. The role of the POS forecasting method is to track data on each person who walks in the café, not only walks in, but dines, or who just comes in to get a drink or desert. This data is collected and sent to the headquarters data center to forecast how much a person consumes and piles statistics on consumers to predict future demands and what they can expect from other consumers.

3. The three year weighted moving average is calculated to determine bonuses by comparing data from the past 3 years to the following past three years. The point of the weighted system is to determine whether or not managers met and/or...