Making Decisions Based on Demand and Forecasting
The Pizza Company
Market Demand (Q) Price (P) Competitor Price (Px) Advertising (Ad) Income (I)
1 596,611 7.62 6.54 200,259 54,880
2 596,453 7.29 5.01 204,559 51,755
3 599,201 6.66 5.96 206,647 52,955
4 572,258 8.01 5.30 207,025 54,391
5 558,142 7.53 6.16 207,422 48,491
6 627,973 6.51 7.56 216,224 51,219
7 593,024 6.20 7.15 217,954 48,685
8 565,004 7.28 6.97 220,139 47,219
9 596,254 5.95 5.52 220,215 49,775
10 652,880 6.42 6.27 220,728 54,932
11 596,784 5.94 5.66 226,603 48,092
12 657,468 6.47 7.68 228,620 54,929
13 519,866 6.99 5.10 230,241 46,057
14 612,941 7.72 5.38 232,777 55,239
15 621,707 6.46 6.20 237,300 53,976
16 597,215 7.31 7.43 238,765 49,576
17 617,427 7.36 5.28 241,957 55,454
18 572,320 6.19 6.12 251,317 48,480
19 602,400 7.95 6.38 254,393 53,249
20 575,004 6.34 5.67 255,699 49,696
21 667,581 5.54 7.08 262,270 52,600
22 569,880 7.89 5.10 275,588 50,472
23 644,684 6.76 7.22 277,667 53,409
24 605,468 6.39 5.21 277,816 52,660
25 599,213 6.42 6.00 279,031 50,464
26 610,735 6.82 6.97 279,934 49,525
27 603,830 7.10 5.30 287,921 49,489
28 617,803 7.77 6.96 289,358 49,375
29 529,009 8.07 5.76 294,787 48,254
30 573,211 6.91 5.96 296,246 46,017
The Pizza Company is considering entering the marketplace in your community. Use the information from “The Pizza Company Data” worksheet, located in Week 3 of your course shell, to complete this assignment. By conducting a demand analysis and forecast for pizza, you will be able to make a decision whether The Pizza Company should establish a presence in your community.
Write a three to five (3-5) page paper in which you:
Use Excel or other calculation software to input the data to calculate an estimated regression. Then, from the calculation provided, interpret the coefficient of determination, indicating how it will influence your decision to open the pizza business in your town or community. Explain any additional variables that may improve the coefficient of determination.
Test the statistical significance of the independent variables and the regression equation, indicating how it will impact your decision to open the pizza shop.
Forecast the demand for pizza for the next four (4) periods using the regression equation.
Based on the forecasted demand, determine whether The Pizza Company should establish an operation in your community. Provide a rationale and support for the decision.
Your assignment must follow these formatting requirements:
Apply the concepts of supply and demand to determine the impact of changes in market conditions in the short run and long run, and the economic impact on a company’s operations.
Use technology and information resources to research issues in managerial economics and globalization.
Write clearly and concisely about managerial economics and globalization using proper writing mechanics.
Grading for this assignment will be based on answer quality, logic / organization of the paper, and language and writing skills, using the following rubric.
Points: 200
Assignment 1: Making Decisions Based on Demand and Forecasting
Criteria
Unacceptable
Below 70% F
Fair
70-79% C
Proficient
80-89% B
Exemplary
90-100% A
1. Use Excel or other calculation software to input the data to calculate an estimated regression. Then, from the calculation provided, interpret the coefficient of determination, indicating how it will influence your decision to open the pizza business in your town or community. Explain any additional variables that may improve the coefficient of determination.
Weight: 20%
Did not submit or incompletely used Excel or other calculation software to input the data to calculate an estimated regression. Did not submit or incompletely interpreted the coefficient of determination from the calculation provided, indicating how it will influence your decision to open the pizza business in your town or community. Did not submit or incompletely explained any additional variables that may improve the coefficient of determination.
Partially used Excel or other calculation software to input the data to calculate an estimated regression. Partially interpreted the coefficient of determination from the calculation provided, indicating how it will influence your decision to open the pizza business in your town or community. Partially explained any additional variables that may improve the coefficient of determination.
Satisfactorily used Excel or other calculation software to input the data to calculate an estimated regression. Satisfactorily interpreted the coefficient of determination from the calculation provided, indicating how it will influence your decision to open the pizza business in your town or community. Satisfactorily explained any additional variables that may improve the coefficient of determination.
Thoroughly used Excel or other calculation software to input the data to calculate an estimated regression. Thoroughly interpreted the coefficient of determination from the calculation provided, indicating how it will influence your decision to open the pizza business in your town or community. Thoroughly explained any additional variables that may improve the coefficient of determination.
2. Test the statistical significance of the independent variables and the regression equation, indicating how it will impact your decision to open the pizza shop.
Weight: 25%
Did not submit or incompletely tested the statistical significance of the independent variables and the regression equation, indicating how it will impact your decision to open the pizza shop.
Partially tested the statistical significance of the independent variables and the regression equation, indicating how it will impact your decision to open the pizza shop.
Satisfactorily tested the statistical significance of the independent variables and the regression equation, indicating how it will impact your decision to open the pizza shop.
Thoroughly tested the statistical significance of the independent variables and the regression equation, indicating how it will impact your decision to open the pizza shop.
3. Forecast the demand for pizza for the next four (4) periods using the regression equation.
Weight: 20%
Did not submit or incompletely forecasted the demand for pizza for the next four (4) periods using the regression equation.
Partially forecasted the demand for pizza for the next four (4) periods using the regression equation.
Satisfactorily forecasted the demand for pizza for the next four (4) periods using the regression equation.
Thoroughly forecasted the demand for pizza for the next four (4) periods using the regression equation.
4. Based on the forecasted demand, determine whether The Pizza Company should establish an operation in your community. Provide a rationale and support for the decision.
Weight: 25%
Did not submit or incompletely determined whether The Pizza Company should establish an operation in your community based on the forecasted demand. Did not submit or incompletely provided a rationale and support for the decision.
Partially determined whether The Pizza Company should establish an operation in your community based on the forecasted demand. Partially provided a rationale and support for the decision.
Satisfactorily determined whether The Pizza Company should establish an operation in your community based on the forecasted demand. Satisfactorily provided a rationale and support for the decision.
Thoroughly determined whether The Pizza Company should establish an operation in your community based on the forecasted demand. Thoroughly provided a rationale and support for the decision.
5. Clarity, writing mechanics, and formatting requirements
Weight: 10%
More than 6 errors present
5-6 errors present
3-4 errors present
0-2 errors present
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