Problem Solving Case

The local department store suffered heavy damage when a storm

struck. The store had to close for four months $($September through

December$).$ The store is now in a dispute with its insurance carrier

about the dollar value of lost sales during the closure.

There are two key issues:

$1.$ The amount of sales that would have occurred if the storm had

not happened.

$2.$ The amount of compensation adjustment that needs to be made

due to excess sales due to increased business activity after the

storm. In other words, did people rush to buy more goods the

four months after the storm took place?

Sales for Our Department Store $($$ millions$)$

Month Year $1$ Year $2$ Year $3$ Year $4$ Year $6$

January $1\mathrm{.}452\mathrm{.}312\mathrm{.}312\mathrm{.}56$

February $1\mathrm{.}801\mathrm{.}891\mathrm{.}992\mathrm{.}28$

March $2\mathrm{.}032\mathrm{.}022\mathrm{.}422\mathrm{.}69$

April $1\mathrm{.}992\mathrm{.}232\mathrm{.}452\mathrm{.}48$

May $2\mathrm{.}322\mathrm{.}392\mathrm{.}572\mathrm{.}73$

June $2\mathrm{.}202\mathrm{.}142\mathrm{.}422\mathrm{.}37$

July $2\mathrm{.}132\mathrm{.}272\mathrm{.}402\mathrm{.}31$

August $2\mathrm{.}432\mathrm{.}212\mathrm{.}502\mathrm{.}23$

Septembe

r

$1\mathrm{.}711\mathrm{.}901\mathrm{.}892\mathrm{.}09$

October $1\mathrm{.}902\mathrm{.}132\mathrm{.}292\mathrm{.}54$

November $2\mathrm{.}742\mathrm{.}562\mathrm{.}832\mathrm{.}97$

December $4\mathrm{.}204\mathrm{.}164\mathrm{.}044\mathrm{.}35$

Sales for All County Department Store $($$ Millions$)$

Month Year $1$ Year $2$ Year $3$ Year $4$ Year $6$

January $46\mathrm{.}8046\mathrm{.}8043\mathrm{.}8048\mathrm{.}00$

February $48\mathrm{.}0048\mathrm{.}6045\mathrm{.}6051\mathrm{.}60$

March $60\mathrm{.}0059\mathrm{.}4057\mathrm{.}7057\mathrm{.}60$

April $57\mathrm{.}6058\mathrm{.}2053\mathrm{.}4058\mathrm{.}20$

May $61\mathrm{.}8060\mathrm{.}6056\mathrm{.}4060\mathrm{.}00$

June $58\mathrm{.}2055\mathrm{.}2052\mathrm{.}8057\mathrm{.}00$

July $56\mathrm{.}4051\mathrm{.}0054\mathrm{.}0057\mathrm{.}60$

August $63\mathrm{.}0055\mathrm{.}8060\mathrm{.}6061\mathrm{.}80$

Septembe

r

$55\mathrm{.}8057\mathrm{.}6049\mathrm{.}8047\mathrm{.}4069\mathrm{.}00$

October $56\mathrm{.}4053\mathrm{.}4054\mathrm{.}6054\mathrm{.}6075\mathrm{.}00$

November $71\mathrm{.}4071\mathrm{.}4065\mathrm{.}4067\mathrm{.}8085\mathrm{.}20$

December $117\mathrm{.}60114\mathrm{.}00102\mathrm{.}00100\mathrm{.}20121\mathrm{.}80$

Questions:

You do not have to actually perform the calculations. What analyses

would use perform to answer the following:

$1.$ An estimate of sales lost for our department store had there been

no storm.

$2.$ An estimate of countywide department store sales had there been

no storm.

$3.$ Based on results from $(1)$ and $(2)$ above, a case for or against

excess storm$-$related sales.