The C'mon Back Restaurant in Puerto Rico is owned and operated by Theotis Jones. The restaurant just completed its third year of operation. During that time, Theotis sought to establish a reputation for the restaurant as a high-quality dining establishment that specializes in fresh seafood. Through the efforts of Theotis and his staff, his restaurant has become one of the best and fastest-growing restaurants on the island. To better plan for the future growth of the restaurant, Theotis needs to develop a system that will enable him to forecast food and beverage sales by month for up to one year in advance. The following table shows the value of food and beverage sales ($1,000s) for the first three years of operation:

Month	1st year	2nd year	3rd year
January	248	270	289
February	240	243	261
March	237	252	271
April	184	199	212
May	190	200	217
June	146	154	166
July	151	163	172
August	157	166	180
September	117	129	132
October	137	136	132
November	159	173	180
December	213	236	241

a) Perform an analysis of the sales data for the restaurant. Prepare a report for Theotis that summarizes your findings, forecasts, and recommendations. Include the following:

1. A time series plot. Comment on the underlying pattern in the time series.

2. Using the dummy variable approach, forecast sales for January through December of the fourth year.

b) How would you explain this model to Theotis?

c) Assume that January sales for the fourth year turn out to be $295,000. What was your forecast error?

d) If this error is large, Theotis may be puzzled about the difference between your forecast and the actual sales value. What can you do to resolve his uncertainty about the forecasting procedure?