Describe the difference between independent and dependent demand and give an example of each for a pizza restaurant such as Domino’s or Pizza Hut.

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Answer 1

Textbook Question

Chapter 13, Problem 1Q

Describe the difference between independent and dependent demand and give an example of each for a pizza restaurant such as Domino’s or Pizza Hut.

Expert Solution & Answer

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

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Scenario You have been given a task to create a demand forecast for the second year of sales of a premium outdoor grill. Accurate forecasts are important for many reasons, including for the company to ensure they have the materials they need to create the products required in a certain period of time. Your objective is to minimize the forecast error, which will be measured using the Mean Absolute Percentage Error (MAPE) with a goal of being below 25%. You have historical monthly sales data for the past year and access to software that provides forecasts based on five different forecasting techniques (Naïve, 3-Month Moving Average, Exponential Smoothing for .2, Exponential Smooth for .5, and Seasonal) to help determine the best forecast for that particular month. Based on the given data, you will identify trends and patterns to create a more accurate forecast. Approach Consider the previous month's forecast to identify which technique is most effective. Use that to forecast the next…

Approach Consider the previous month's forecast to identify which technique is most effective. Use that to forecast the next month. Remember to select the forecasting technique that produces the forecast error nearest to zero. For example: a. Naïve Forecast is 230 and the Forecast Error is -15. b. 3-Month Moving Forecast is 290 and the Forecast Error is -75. c. Exponential Smoothing Forecast for .2 is 308 and the Forecast Error is -93. d. Exponential Smoothing Forecast for .5 is 279 and the Forecast Error is -64. e. Seasonal Forecast is 297 and the Forecast Error is -82. The forecast for the next month would be 230 as the Naïve Forecast had the Forecast Error closest to zero with a -15. This forecasting technique was the best performing technique for that month. You do not need to do any external analysis-the forecast error for each strategy is already calculated for you in the tables below. Naïve Month Period Actual Demand Naïve Forecast Error 3- Month Moving Forecast 3- Month Moving…

Scenario You have been given a task to create a demand forecast for the second year of sales of a premium outdoor grill. Accurate forecasts are important for many reasons, including for the company to ensure they have the materials they need to create the products required in a certain period of time. Your objective is to minimize the forecast error, which will be measured using the Mean Absolute Percentage Error (MAPE) with a goal of being below 25%. You have historical monthly sales data for the past year and access to software that provides forecasts based on five different forecasting techniques (Naïve, 3-Month Moving Average, Exponential Smoothing for .2, Exponential Smooth for .5, and Seasonal) to help determine the best forecast for that particular month. Based on the given data, you will identify trends and patterns to create a more accurate forecast. Approach Consider the previous month's forecast to identify which technique is most effective. Use that to forecast the next…

Answer 2

Textbook Question

Chapter 13, Problem 1Q

Describe the difference between independent and dependent demand and give an example of each for a pizza restaurant such as Domino’s or Pizza Hut.

Expert Solution & Answer

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 13, Problem 1Q

Describe the difference between independent and dependent demand and give an example of each for a pizza restaurant such as Domino’s or Pizza Hut.

Expert Solution & Answer

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 13, Problem 1Q

Describe the difference between independent and dependent demand and give an example of each for a pizza restaurant such as Domino’s or Pizza Hut.

Expert Solution & Answer

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

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Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

Answer 8

Expert Solution & Answer

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Answer 12

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

Answer 13

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Describe the difference between independent and dependent demand and give an example of each for a pizza restaurant such as Domino’s or Pizza Hut.

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