...Making Decisions Based on Demand and Forecasting Latonya Woodrow Instructor Name: Dr.Samuel F. Onipede ECO 550 –Managerial Economics and Globalization July 21, 2013 College Students buy pizza in large quantities for a cheap price, but if the prices were to increase, then these same students may look for similar alternatives that will not empty their wallets. These are possible alternatives that offer a large quantity of food at a reasonable price that can affect the demand of pizza. However, monitoring the costs of the competing fast food restaurants in the Charlotte, North Carolina, area will allow Domino’s Pizza to offer certain specials and pizza deals to the community that can keep their demand at a high rate. A market demand analysis is used to help understand how much consumer demand there is for a given product or service. This type of analysis will help determine if a business can successfully enter a market and generate enough revenue and profit to maintain the business. One must identify the market and the growth potential. Domino’s Pizza was incorporated in 1963 and has been franchising since 1967. A traditional Domino’s store is located in shopping centers and/or strip malls with appropriate parking for delivery vehicles and walk-in customers for carry-out services...
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...Making Decisions Based on Demand and Forecasting Robyn Wilson Strayer University Econ 550 Assignment One January 31, 2013 Report the demographic and independent variables that are relevant to complete a demand analysis providing a rationale for the selection of the variables. Demographics are an important variable when choosing target marketing strategies. The variables are relevant to complete a demand analysis by providing a rationale for the selection of the variables. Whithin my area, Cross, SC, I am looking at local demographics and paying special attention to the following: • Age: Persons under 18 years percent 27.4% • Income levels: Average 39,779 per household • Persons below poverty level: 17.2% • Education: Bachelor degree age 25+ percent 13.1% • Housing: ownership rate 57.9% Making an informed analysis will inform you about the spending and eating habits of the people who live in the servicing area. Demogrphics give you a clear understanding of the areas behavior, values, cultures, interests and lifestyles of the community. Data research was consider because of the amount of time given for the assignment. The success of Domino’s opening a location in Cross, SC will depend on the factors listed above. Having a customer loyalty program that will have frequent customers that will come buy the products will help the company save on selling expenses...
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...Running Head: DEMAND AND FORECASTING Making Decisions Based on Demand and Forecasting [bami] strayer University] Making Decisions Based on Demand and Forecasting The demographics used for the demand analysis are the average yearly income of the house hold in Georgia, the total yearly population, and average kids per house. The rationale behind choosing these demographics is that the demand is highly associated with the average income, and can have a great impact on the demand of the economy, for higher the income, the higher the spending ability of an average house hold. Therefore, it can also be said that the average income is directly proportional to the spending ability of an average house hold, whereas as far as total yearly population is concerned, demand is also associated with the total population, as for demand arises with rise in population. Average kids per house hold also have a strong link with demand. Considering the fact that pizza is highly popular among kids, and is the cause of its major demand. The other independent variables used for conducting a demand analysis are price of the pizza, and price of the soda. The rationale behind choosing these demographics is that the demand is also highly associated with price, as per the demand and supply law, the lower the price the higher the demand, and the higher the price, the lower the demand. Pizza and soda are two main products of a pizza restaurant...
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...Assignment 1: Making Decisions Based on Demand and Forecasting Assignment 1: Making Decisions Based on Demand and Forecasting ECO 550 January 24, 2013 Assignment 1: Making Decisions Based on Demand and Forecasting Page 1 I have been considering opening a Domino’s Pizza in my community within the Virginia Beach area. In this paper I will present to you, a data analysis and a forecast of Domino Pizza’s sales revenue that consist of the demographics within my community. These demographics consist of the population size, the average income per household and the independent variables which include the price in pizza and soda. This demand analysis will be used to give an estimated forecast that will assist in my business making decision technique, which will determine if it will be beneficial for me to open a Domino’s Pizza in my area. To determine if I will enter into the market place in Virginia Beach, I will research the reported demographic and independent variables that are relevant to complete a demand analysis that has been provided to me from different resources within my community. By using Excel to calculate, I will input the data that I have collected to create an estimated regression analysis. Once the calculation has been provided, I will be able to interpret the coefficient of determination, and how it has provided an influence on my decision to open the pizza business in my area. Variables. The significant...
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...Tool 3. Demand Analysis Economic Analysis of Tobacco Demand Nick Wilkins, Ayda Yurekli, and Teh-wei Hu DRAFT USERS : PLEASE PROVIDE FEEDBACK AND COMMENTS TO Joy de Beyer ( jdebeyer@worldbank.org) and Ayda Yurekli (ayurekli@worldbank.org) World Bank, MSN G7-702 1818 H Street NW Washington DC, 20433 USA Fax : (202) 522-3234 Contents I. Introduction 1 Purpose of this Tool 1 Who Should Use this Tool 2 How to Use this Tool 2 II. Define the Objectives of the Analysis 4 The Reason for Analysis of Demand 4 The Economic Case for Demand Intervention 4 Analysis of Demand for the Policy Maker 5 Design an Analysis of Demand Study 6 Components of a Study 6 The Nature of Econometric Analysis 7 Resources Required 7 Summary 8 References and Additional Information 8 III. Conduct Background Research 9 IV. Build the Data Set 11 Choose the Variables 11 Data Availability 11 Data Types 12 Prepare the Data 13 Data Cleaning and Preliminary Examination 14 Preparing the Data Variables 14 References and Additional...
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...Assignment 1: Making Decisions Based on Demand and Forecasting An Assignment Submitted by Name of Student Name of Establishment Class XXXX, Section XXXX, Fall 2013 Assignment 1: Making Decisions Based on Demand and Forecasting Regression analysis is the description about the relationship between two variables where one is dependent and the other is independent. Regression analysis (in statistics), generally, is about any techniques that facilitate modeling and analysis of several variables. It focuses on the relationship between a dependent variable and one or more independent variables (Sykes, 2000). To be specific, regression analysis allows understanding of the typicality of value of the dependent variable changes, while any one of the independent variables is varied. At the same time, the other independent variables must be fixed. Usually, regression analysis estimates the expectation of conditions connected to the dependent variable given the independent variables (Sykes, 2000). Thus, the average value of the dependent variable is calculated using condition that the independent variables are held fixed. Not that often, regression analysis focuses on a quantile, or other location parameter of the conditional distribution of the dependent variable given the independent variables. Nevertheless, the regression function is the estimation target, which is a function of the independent variables. In regression analysis, it is also necessary...
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...Making Decisions Based on Demand & Forecasting Assignment 1 The Demand Analysis of Domino’s Pizza Established in Woodruff SC This is a demand analysis on the decision-making process of whether Domino’s Pizza should enter the area of Woodruff, SC. It is going to reflect the research of demographics, population size, and average income per household, as well as the advertising costs for the competitor in the same market and area. The research is based on the variables taken from the years 2000, 2005, and 2010. With this criterion entered into the demand analysis equation it will assist in the decision-making process of if they should enter Woodruff’s market area or not. The logic of selecting these variables in population size and average income per household is that in the study of Economics and research in analysis of demand reflects highly to the demand curve function. The demand function can be defined by our textbook on page 32 as follows: “A relationship between quantity demanded and all the determinants of demand.” When looking at the effects in the shifting of the demand curve it is substantial in stating that a shift in the demand curve is based on any of the other factors of the demand function besides price causing the shift to occur. The demand based on average income in comparison to the size of the population of Woodruff is a definite factor in our conclusion of the decision-making process based on the impacts that the average income has on the quantity demanded...
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...appreciate the strategic significance of pricing decisions in marketing strategy understand the approaches to pricing of the economist and accountant, together with their contributions and limitations in the context of the price setting process n apply a framework to pricing decisions based around the key inputs to these decisions n understand the main pricing methods and their relative advantages and disadvantages 160 Pricing strategies INTRODUCTION The price of a company’s products and services represents the vehicle for that company to achieve its financial objectives. It is through price and volume that revenue is generated. Price equates to the financial sacrifice that the customer is willing to make to purchase the product or service desired. The important criterion of pricing is problematical to marketers. This is attributed to the uncertainty associated with pricing decisions as it is a complicated area of decision making. It is with a view to examining this problem and the ways in which it can be resolved that his chapter is framed. The pressures of today’s market environment place increasing burdens on management. It is important, therefore, that the decision maker has a framework for making pricing decisions. We start by examining the traditional economist’s view of price to illustrate both the shortcomings and potential contributions of this approach as a prelude to discussing more strategic pricing approaches for the decision maker. THE ECONOMIST’S VIEW OF PRICING Traditionally...
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...2 Value Chain Management The theoretical background is defined around the central term value chain. Chapter 2 presents research concepts to manage the value chain structured by their area of specialization either on supply, demand or values. Secondly, within an integrated framework, the results of the specialized disciplines are combined with the objective to manage sales and supply by values and volume. Value chain management is defined and positioned with respect to other authors’ definitions. A value chain management framework is established with a strategy process on the strategic level, a planning process on the tactical level and operations processes on the operational level. These management levels are detailed and interfaces between the levels are defined. Since the considered problem is a planning problem, the framework serves for structuring planning requirements as well as the model development in the following chapters. 2.1 Value Chain Value chain as a term was created by Porter (1985), pp. 33-40. A value chain “disaggregates a firm into its strategically relevant activities in order to understand the behavior of costs and the existing and potential sources of differentiation”. Porter’s value chain consists of a “set of activities that are performed to design, produce and market, deliver and support its product”. Porter distinguishes between • primary activities: inbound logistics, operations, outbound logistics, marketing and sales, service in the core value...
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...Individual Supply and Demand Simulation ECO/365 Individual Supply and Demand Simulation In the University of Phoenix simulation (2003), the “applying supply and demand concepts” simulation made it very easy to understand how supply, demand and the equilibrium function together. The simulation was based on scenarios of renting two-bedroom apartments in a city called Atlantis. In the simulation, several factors are utilized to explain the distinction in demand, supply, price of rent, shortages, as well as surpluses of apartments for rent. It also provided an opportunity to learn the difference in movement along and shift curves of supply and demand to re-establish the equilibrium. The simulation was easy to use and the graphs helped understand the curve movements better. An analysis of why different situations occurred based on the different scenarios in the simulation will be discussed. The two major microeconomic concepts discussed in the simulation are Supply and demand. Colander (2010), “Microeconomics is the study of individual choice, and how that choice is influenced by economic forces” (p.15). In this simulation, rental rates are determined based on the changes in the supply and demand. The simulation presented changes with the Lintech move into Atlantis that initially creating higher demand for the apartments. However, the demanded decreased as people seem interested in buying detached homes. In response, Goodlife converted some units into condominium to sell that...
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...goals when appropriate. By setting short term budget goals and reaching them it helps to ensure that the company is on pace to reach its long term objectives. Budgets need to be revised whenever they no longer useful for planning and control purposes. Anytime there are major changes in the processes or operations the budgets will also need to be revised. Budget figures should be measured frequently to ensure they are still reasonable and that the company is still on track to reach its goals. A Pro-Forma Statement is defined as “a financial statements prepared on the basis of some assumed events and transactions that have not yet occurred.” (Ralph Estes). Unlike Historical Financial Statements which use real scientific information and are based on facts, Pro-Forma Financial Statements use assumptions to help forecast the future and allow for the use of...
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...that will standardise and improve controls across our entire supply chain and manufacturing operations. To help us improve the business decisions we make across the enterprise we are going to implement a new process called the Core Commercial Cycle which is a key enterprise wide planning and decision-making process which brings together Commercial, Finance and Supply Chain to ensure supply chain plans allow us to meet the expected demand for our products. In practice, CCC takes form of a series of monthly meetings performed at global level. There are 3 important governing bodies in this cycle as described in the scheme below : the GDRM (Global Demand Review Meeting) aiming to review and agree the demand forecast for the next 2 years (risks, opportunities and issues), the GSRM (Global Supply Review Meeting) aiming to develop supply plan and scenarios on how to respond to the demand signal provided by the GDRM and finally, the S&OP (Sales and Operations Planning Meeting) where final decisions are taken based on the review of the escalations to end-up to the sign-off of an aggregated demand forecast and supply plan. Our Supply Chain execution and responsiveness require the tight synchronisation of supply and demand, as well as the orchestration of the data and information flow to analyse its performance and support the decision-making. If every part of the supply chain has its own data, then you have lots of debate over comparability. Therefore, an integrated supply...
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...3 Decision Analysis 1) Expected monetary value (EMV) is the average or expected monetary outcome of a decision if it can be repeated a large number of times. Answer: TRUE Diff: 2 Topic: DECISION MAKING UNDER RISK 2) Expected monetary value (EMV) is the payoff you should expect to occur when you choose a particular alternative. Answer: FALSE Diff: 2 Topic: DECISION MAKING UNDER RISK 3) The decision maker can control states of nature. Answer: FALSE Diff: 1 Topic: THE SIX STEPS IN DECISION MAKING 4) All decisions that result in a favorable outcome are considered to be good decisions. Answer: FALSE Diff: 2 Topic: INTRODUCTION 5) The difference in decision making under risk and decision making under uncertainty is that under risk, we think we know the probabilities of the states of nature, while under uncertainty we do not know the probabilities of the states of nature. Answer: TRUE Diff: 2 Topic: TYPES OF DECISION-MAKING ENVIRONMENTS 6) EVPI (expected value of perfect information) is a measure of the maximum EMV as a result of additional information. Answer: TRUE Diff: 2 Topic: DECISION MAKING UNDER RISK 7) When using the EOL as a decision criterion, the best decision is the alternative with the largest EOL value. Answer: FALSE Diff: 2 Topic: DECISION MAKING UNDER RISK 8) To determine the effect of input changes on decision results, we should perform a sensitivity analysis. Answer: TRUE Diff: 2 Topic: DECISION MAKING...
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...and capacity. Timing is a factor that needs built into our decision tree’s framework and in this case, ultimately asking, when and how much capacity? In order to answer the question, we diagnosed the issues and identified limitations of the current capacity, which hampers Harley’s ability to expand and meet demand. It is important to appropriately incorporate risk as it goes well beyond just capacity. For incorporate risk into the analysis and decision making we recognized that a series of tools would be required. The approach involved three analysis tools for considering various factors that are important for decision making: Demand Analysis: We needed to forecast for the demand, supply and margins, while distinguishing demand from output and sales. Scenarios and Capacity Analysis: Next step was to determine the factors for building the scenarios, assign probabilities, estimate the cash flow and then compute the NPV. We modeled capacity adjustments and continuous improvements, then included plans or options for changes and new products. Risk Analysis and addressing management’s success criteria: Our decision needed to account for the risk aversion of the company due to its learning from its history, and also encompass company’s long term strategy and success criteria’s laid out by management. In next few pages we lay out the points incorporating above tools and provide team’s recommendation which is based on Harley-Davidson’s long term strategy and values. We start...
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...Microeconomics and the Laws of Supply and Demand K. G. ECO/365 April 7, 2015 Marcia Wojsko Microeconomics and the Laws of Supply and Demand This essay is based on the University of Phoenix simulation “Supply and Demand” located in the classroom-week 2 activities I completed. It was about the microeconomic concepts of the supply and demand curves that change based on different macroeconomic factors that affect the apartment rental industry. Two microeconomic concepts in this simulation were the supply and demand of two-bedroom rental apartments in Atlantis because these are based on decisions made by the individual consumer or rental agency. The simulation showed shifts to the supply and demand curves caused significant changes to the economic environment. “The demand curve is downward sloping, and that quantity demanded increases as the price decreases - that is, as you move down the demand curve” (University of Phoenix, 2015). “The supply curve is upward sloping, and quantity supplied increases with an increase in price – that is, as you move up the curve” (University of Phoenix, 2015). The macroeconomic factors in this simulation are what causes the shifts, beyond any one entity’s choice. In this simulation, it showed different scenarios of increased population and changes in consumer income. When the population increases, the demand curve moves to the right because of increased need of two-bedroom apartments. This does not shift the supply curve because there is...
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