Bus308: Statistics for Managers - Final Paper

1055 Words Jul 6th, 2012 5 Pages
Gas Prices
Nathaniel Peters
BUS 308: Statistics for Managers
Instructor: Ali Choudhry
August 8, 2011

Gas Prices Delivery service is a way of life. Each day, people get packages sent to them by way of this service. But few people think of the costs the delivery company has to deal with. One of the main operating costs that we as a delivery company have is gasoline. We use gasoline daily in massive quantities. The cost of gas affects American’s daily, and people can be heard complaining about the high prices. What about delivery companies? In this paper, we will be discussing the effect of rising gas prices on our company throughout the next ten years. Gas prices change daily, and throughout the year it is amazing to look at the
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On the flip side, in 1990 after Iraq invaded Kuwait, we had a very positive reaction in the oil market. However, as Kilian states, “It is important to keep in mind that typical episodes of sharp movements in gasoline prices involve not a one-time demand or supply shock in a given month, but rather a sequence of shocks occurring over several months, if not years.” Supply shocks happen over time, and hopefully in the event of this happening we will have enough notice to alter our plan and make a new set of data congruent with the changes that may occur in the oil market and therefore the gasoline prices. We can also assume that we do not have to worry about specific gas stations aggressively increasing their cost. Atkinson, Eckert, and West state the following: “Retail gas prices tent to uniformity (with perhaps very small differentials for service quality differences) in a market, as lard positive deviations from the mode price are unsustainable. Stations charging prices higher than the mode price will experience a substantial loss in business and market share over a short period of time.” By this statement we can predict that all prices within our market will stay pretty much the same. Some with better service will always tend to be a bit higher, but these will also increase exponentially with time, as is shown by the linear regression within our scatter chart. Using the linear

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