Demand and Forecast Essays

921 Words Jul 27th, 2013 4 Pages
The report will be based on the independent variables such as the price of Pizza, age of the population and income per household. Population and growth are the major determinants of the area in question. The vital issue is to establish whether the city is able to maintain another Pizza delivery business at the current population to the ratio of the restaurant. The level of income per each household is relative to demand of Pizza and normally the higher the income per household, the higher the number of people who demand the product (Draper, Smith & Pownell, 2001). The levels of income are significant in the profitability and sustainability of the business entity. Regions that have high people with high income can pay extra cash for …show more content…
[pic] From the above figure, y represents the total sales of Pizza whereas x represents the income of residents found within the area that Domino wants to venture. From the figure, we can be able to calculate the regression line. For instance, y will be the variable that depend on x. in the case of Pizza business, the dependent variables will be measured along the vertical axis (Froeb & McCann, 2010). If the diagram has four points (x1, y1) (x2, y2) (x3, y3) (x4, y4) then this diagram is considered to have points known as scatter points. The scatter points helps to calculate the slope of the intercept and slope for Pizza. When pizza shop will be located in the city, for instance with many people who have high income, the rates of sales will increase significantly.
Two values are chosen a and b which have to satisfy the following equations. Y: represents dependent variable and the amount to be determined a: represents constant value y-intercept b: shows the slope (regression coefficients), X: is the independent variable μ: is the random error Y = a + bX +μ

The independent variable that analyses the coefficient of establishment of Domino Pizza in the new business environment is the price of Pizza and the income of the population within the city. Based on the above line of regression, there is a positive

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