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Tuesday, January 24, 2006

Forecasting 401 - Day Profiles

Two of the simplest profiles for a sales forecast are Slammed and Dead. It's pretty easy to order food and beverage and schedule staff for these two expectations. A simple spreadsheet with date, dow, sales and special event is all that is needed to perform percentile analysis. I'd prefer at least two years of data. Sort the file by sales. Divide the number of data points by 5.

Now split the sheet in 5 parts. Note the highest and lowest sales figure for each partition. That's all we need for this analysis.

Save the sheet and start a new one. The left column is the Description, next column is High, then Low, then Midpoint. Fill in the Description with Slammed, Busy, Typical, Slow, and Dead. Fill in the High and Low numbers with the data points taken from the master sheet. In the Midpoint column, you'll create a simple formula as follows: Midpoint=(High + Low)/2.

Create a staffing chart for each of the 5 Midpoint sales levels.

Take a look at the upcoming week. Label each day as Slammed, Dead, etc. Use the staffing chart and the budget food cost % times the sales estimates to complete the forecast. The result of this work is a simple forecast for sales, staffing and food cost.

Once you're comfortable with the profiling method, you can change the number of descriptions. Perhaps you could have 7 or as many as 9 increments. The food cost % analysis can be extended to beverages, supplies, and other categories. All categories should be controllable operating expenses.

Seasonal operations may want to create a off-season chart and a peak season chart.

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