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rr2013
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A bit confused with this question. my answers are below each question. please help.
Branded Products, Inc., based in Halfway Tree is a leading producer and marketer of household laundry detergent and bleach products. About a year ago, Branded products rolled out its new Super Detergent in four western parishes, following success in more limited test markets. At the time of introduction, management wondered whether the company could successfully crack this market, dominated by Breeze and other major players. The following regression model forecast results for Super Detergent over the past seven months (30 weeks). The t-statistics are in parenthesis.
Q = 867.98 – 81.86P + 0.007A + 0.006I + 82.86Px + 1.309T
(345) (24) (0.7) (0.2) (18) (0.063)
R2 = 91.47%, Standard of Error of the Estimate = 33.64 t(0.01, (n-k)df) = 2.492, F(k-1, n-k, 0.01) = 3.895
Q is the demand in cases, P is tile price (per case), Px is the competitor price, A is advertising expenditures (in thousands of dollars), I is disposable income per capita (in thousands of dollars) and T represent the month.
If P = $700.5, Px = $750 A= $350,000 I = $900,0001.What is the revenue implication for Branded Products, if there a recession? If there is a recession income will be affected(reduced) and this reduce revenue; a 302.24 reduction- (dervived from subtracting t-test values- 345-(24+.7+18+0-0.063)
2.What proportion of the variation in super detergent sales is explained by the regression model?
91.47%
3.Determine if Branded products should be concerned about its main competitors
yes any change in comptetirs price will affect barnded products revenue by 18%
4.If Branded Products wants to maintain at least its share of the market, what change in the price of their detergent will be necessary to compensate for a \$100 decrease in the price of its main competitors’ detergent?
$700-$700*18%=$574
Branded Products, Inc., based in Halfway Tree is a leading producer and marketer of household laundry detergent and bleach products. About a year ago, Branded products rolled out its new Super Detergent in four western parishes, following success in more limited test markets. At the time of introduction, management wondered whether the company could successfully crack this market, dominated by Breeze and other major players. The following regression model forecast results for Super Detergent over the past seven months (30 weeks). The t-statistics are in parenthesis.
Q = 867.98 – 81.86P + 0.007A + 0.006I + 82.86Px + 1.309T
(345) (24) (0.7) (0.2) (18) (0.063)
R2 = 91.47%, Standard of Error of the Estimate = 33.64 t(0.01, (n-k)df) = 2.492, F(k-1, n-k, 0.01) = 3.895
Q is the demand in cases, P is tile price (per case), Px is the competitor price, A is advertising expenditures (in thousands of dollars), I is disposable income per capita (in thousands of dollars) and T represent the month.
If P = $700.5, Px = $750 A= $350,000 I = $900,0001.What is the revenue implication for Branded Products, if there a recession? If there is a recession income will be affected(reduced) and this reduce revenue; a 302.24 reduction- (dervived from subtracting t-test values- 345-(24+.7+18+0-0.063)
2.What proportion of the variation in super detergent sales is explained by the regression model?
91.47%
3.Determine if Branded products should be concerned about its main competitors
yes any change in comptetirs price will affect barnded products revenue by 18%
4.If Branded Products wants to maintain at least its share of the market, what change in the price of their detergent will be necessary to compensate for a \$100 decrease in the price of its main competitors’ detergent?
$700-$700*18%=$574
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