Hard Rock Cafe Case Study

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February 6, 2015 Operations Management and Logistics MAN3504 Hard Rock Café Forecasting Assignment Forecasting is defined by the text as the art and science of predicting future events. Forecasting may involve taking historical data (such as past sales) and projecting them into the future with a mathematical model. It may be a subjective or an intuitive prediction (e.g., “this is a great new product and will sell 20% more than the old one.”) It may also be based on demand-driven data, such as customer plans to purchase, and projecting them into the future. The forecast may involve a combination of these, that is, a mathematical model adjusted by a manager’s good judgment (Heizer and Render 104). Three forecasting applications utilized at Hard Rock Café include: * Long-Range Forecasting in setting a capacity plan * Intermediate-Range Forecasting for looking at contracts for leather goods (used in jackets) and for such food items such as beef, chicken, and pork * Short-Term Sales Forecasts are conducted each month, by café, and then aggregated for headquarters view (Heizer and Render 150) Three additional area where Hard Rock Café could use forecasting models include: * Economic Forecasts that address the business cycle by predicting inflation rates, money supplies, and other planning indicators. These economic forecasts would lend to adding new facilities and expanding existing locations in order to better serve the clientele. * Demand-Driven Forecasts could be utilized to determine projections of demand for Hard Rock Café’s products and services. Forecasts drive decisions, so managers need immediate and accurate information about real demand. * Subjective or Qualitative forecasts which incorporate such factors as the decision maker’s intuition, emotions, personal experiences, and value system to reach a forecase. The heart of the

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