Assignment 1: Making Decisions Based on Demand and Forecasting
Within this paper a calculation of input data to estimate regression using Excel will be covered. Then, from the calculation provided, and interpretation of the coefficient of determination, indicating how it will influence ones decision to open a pizza business in the Stafford, TX. An explanation of different variables that may improve the coefficient of determination will also be discussed.
Stafford is a fairly small town located in Fort Bend County. The current population for this town is about 17.962 (www.city-data.com). The median income per household in this city from 2011 is $60,861. The median residence age is 31.9, daytime population change due to commuting: +9,503 (+54.3%). This is important because most companies such as Pizza Hut and other establishment target the working adults who do not have time to come home and cook but rather find something quick and simple. The average cost of pizza with a discount or special will average $13-$15 without drink and sides, if you add drinks at $1.50 to 2.00 and sides (wings, bread sticks, desert, etc.) the cost could increase to $30-35 per order. Households that are affected the most are the 3,093 married couples with children, and 937 single-parent households because these are the households with the most variables. Pizza is quick and easy with less mess and hassle after. If on any given night of the week if only half of the household order a full meal averaging $30 per order Pizza Hut could average around $60,000 per night. Just imagine if out of the 4,030 households 2,015 of them had a regular standing order of Pizza Hut every Wednesday night for $30 because it was game night this would average $241,800.00 per month on average. This does not include all the other nights of the week and other household breakdown.
Some variables that should be considered is in Texas alone there are...