Forecasting for the Start-Up Restaurant Owner

Abstract

Hospitality managers use forecasts to control their labor and inventory costs. However, most forecasting models require extensive historical data before they can be applied, and therefore may not be appropriate for businesses that are still in their initial stages. In this study the author compares several time-series and econometric forecasting models to determine which would be most appropriate when forecasting for a recently opened restaurant. The author concludes that a forecast using a simple average of the five most recent periods of data provides the most accurate forecast. Implications for start-up restaurant owners are discussed.

Keywords:

• forecasting
• restaurant
• operations
• time-series models