Prepare a report for the management of the Kingsley department store that summarizes your findings, forecasts and recommendations. Include the following:
1.
An estimate of the sales had there been no hurricane.
Hint: Remember to graph this time series data over the 48-month period to help you determine the type of approach to use to determine the forecast sales for the final 4 months of 2013 for Kingsley department store. Is there a trend in the data (growth or decline)? Is there seasonality in the data (this is a department store … Christmas time and beginning of school are normally big sales periods)? Is there both trend and seasonality?
2.
An estimate of the countywide department store sales had there been no hurricane.
Hint: By comparing the forecast of county-wide department store sales with actual sales, one can determine whether or not there are excess storm-related sales. By computing what is known as a "lift factor" – the ratio of actual sales to forecast sales – you have a measure of the magnitude of excess sales, if these do indeed exist
3.
Your final estimate of lost sales for the Kingsley Department store for Sept – Dec 2020.
The Kingsley Department Store suffered heavy damage when a hurricane struck on August 31, 2016. The store was closed for four months (Sept – Dec 2020) and Kingsley is now involved in a dispute with its insurance company concerning the amount of lost sales during the time the store was closed. Two key issues must be resolved:
1.
The amount of sales Kingsley would have made if the hurricane had not struck; and
2.
Whether Kingsley is entitled to any compensation for excess sales from increased business activity after the storm