Question

The recent development of AI and technology has enabled more accurate forecasting using predictive analysis. Predictive analysis is a promising technique for highly accurate sales forecasting. Pick one operation (restaurant or bar), describe the type of operation (e.g., size, location, cuisine), and discuss what various factors should be included in the predictive modeling analysis, and how those factors would influence sales forecasting for the selected operation.   

Answer 1

Predictive analysis is the method which uses historical data, trends to predict future outcomes. Normally AI uses historical data to build a model including market trends and downfall and uprise of the product and then Predictive Analysis uses current data in the model to get the approx future optimal outcome of the proposed industry.

In current case, lets take restaurant as a base for the prediction. Below are the step by step process for predicting the viability-

1. Data Gather- Data source such as location, cuisine, taste of the people nearby, market trend from past few months

2. Filtering Data- Once all the data are gathered you need to segregate the data on the basis of requirement and remove the data which are not required.

3. Prepare Model- Once the data are sorted and filtered, you should build a model based on the historical information considering the market trend, taste of the people, price of the dishes, overhead expenses.

4. Forecasting- Once the model is built you can use the current data such as your location, type of cuisine, price of the dishes, number of footfall in the restaurant, locality of the restaurant, and other factor.

5. Integration- Once the forecasting process is done and the project if viable then you should place the factors considered while evaluating the model and run the business accordingly.

Factors which influence the sale forecasting would be-

1. Price- The price of the menu would play a vital role in the sale. If the guest believe that the value for money is not there, then eventually people will stop coming to the restaurant, resulting in sale fall .

2. Taste- the taste of the food is one of the major factor which influences the sale. Also this is very critical as the taste is very subjective and you have to understand the taste of the people and incorporate those items in the menu.

3. Area/Locality- The place of business plays again a major role as most of the people consider the ambience of the restaurant while booking a table.

4. Cuisine- The cuisine you are offering should be in trend and should be as authentic as it can. People might not like the cuisine depending on the class, taste and locality of the people.