The forecasting staff for the Prizer Corporation has developed a model to predict sales of its air-cushioned-ride snowmobiles. The model specifies that sales S vary jointly with disposable personal income Y and the population between ages 15 and 40, Z, and inversely with the price of the snowmobiles P. Based on past data, the best estimate of this relationship is S = k Y Z P where k has been estimated (with past data) to equal 100. If Y = $ 11 , 000 , Z = $ 1 , 200 , and P = $ 20 , 000 , what value would you predict for S? What happens if P is reduced to $17,500? How would you go about developing a value for k ? What are the potential weaknesses of this model?

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Answer 1

Textbook Question

Chapter 5, Problem 1E

The forecasting staff for the Prizer Corporation has developed a model to predict sales of its air-cushioned-ride snowmobiles. The model specifies that sales S vary jointly with disposable personal income Y and the population between ages 15 and 40, Z, and inversely with the price of the snowmobiles P. Based on past data, the best estimate of this relationship is S = k Y Z P

where k has been estimated (with past data) to equal 100.

If Y = $ 11 , 000 , Z = $ 1 , 200 , and P = $ 20 , 000 , what value would you predict for S?
What happens if P is reduced to $17,500?
How would you go about developing a value for k?
What are the potential weaknesses of this model?

a)

Expert Solution

To determine

To calculate: The value of S (sales).

Answer to Problem 1E

The value of S is $66000

Explanation of Solution

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

S=kYZPS= 100×11000×120020000S= 66,000

b)

Expert Solution

To determine

To ascertain: The effect of decrease in the value of P.

Answer to Problem 1E

The sales will increase by 75429 − 66000 = $9429

Explanation of Solution

S=kYZPS= 100×11000×120017500S= 75428.57S= 75429 (rounded off)

The sales will increase by 75429 − 66000 = $9429

c)

Expert Solution

To determine

To find: The process to develop the value for K.

Explanation of Solution

The past data of S, Y, Z and P is required where,

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

to formulate the value of k. However, this data will be utilized by various techniques like regression analysis in order to find the value of k.

d)

Expert Solution

To determine

To detect: The potential weakness of the model is to be determined.

Explanation of Solution

The given model depends on three constituents, Y, Z, and P. Therefore, any change in these consequents will change the value of sales. Moreover, it will be difficult to find the consequent that is responsible to change in sales(S).

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Answer 2

Textbook Question

Chapter 5, Problem 1E

The forecasting staff for the Prizer Corporation has developed a model to predict sales of its air-cushioned-ride snowmobiles. The model specifies that sales S vary jointly with disposable personal income Y and the population between ages 15 and 40, Z, and inversely with the price of the snowmobiles P. Based on past data, the best estimate of this relationship is S = k Y Z P

where k has been estimated (with past data) to equal 100.

If Y = $ 11 , 000 , Z = $ 1 , 200 , and P = $ 20 , 000 , what value would you predict for S?
What happens if P is reduced to $17,500?
How would you go about developing a value for k?
What are the potential weaknesses of this model?

a)

Expert Solution

To determine

To calculate: The value of S (sales).

Answer to Problem 1E

The value of S is $66000

Explanation of Solution

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

S=kYZPS= 100×11000×120020000S= 66,000

b)

Expert Solution

To determine

To ascertain: The effect of decrease in the value of P.

Answer to Problem 1E

The sales will increase by 75429 − 66000 = $9429

Explanation of Solution

S=kYZPS= 100×11000×120017500S= 75428.57S= 75429 (rounded off)

The sales will increase by 75429 − 66000 = $9429

c)

Expert Solution

To determine

To find: The process to develop the value for K.

Explanation of Solution

The past data of S, Y, Z and P is required where,

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

to formulate the value of k. However, this data will be utilized by various techniques like regression analysis in order to find the value of k.

d)

Expert Solution

To determine

To detect: The potential weakness of the model is to be determined.

Explanation of Solution

The given model depends on three constituents, Y, Z, and P. Therefore, any change in these consequents will change the value of sales. Moreover, it will be difficult to find the consequent that is responsible to change in sales(S).

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Answer 3

Textbook Question

Chapter 5, Problem 1E

The forecasting staff for the Prizer Corporation has developed a model to predict sales of its air-cushioned-ride snowmobiles. The model specifies that sales S vary jointly with disposable personal income Y and the population between ages 15 and 40, Z, and inversely with the price of the snowmobiles P. Based on past data, the best estimate of this relationship is S = k Y Z P

where k has been estimated (with past data) to equal 100.

If Y = $ 11 , 000 , Z = $ 1 , 200 , and P = $ 20 , 000 , what value would you predict for S?
What happens if P is reduced to $17,500?
How would you go about developing a value for k?
What are the potential weaknesses of this model?

a)

Expert Solution

To determine

To calculate: The value of S (sales).

Answer to Problem 1E

The value of S is $66000

Explanation of Solution

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

S=kYZPS= 100×11000×120020000S= 66,000

b)

Expert Solution

To determine

To ascertain: The effect of decrease in the value of P.

Answer to Problem 1E

The sales will increase by 75429 − 66000 = $9429

Explanation of Solution

S=kYZPS= 100×11000×120017500S= 75428.57S= 75429 (rounded off)

The sales will increase by 75429 − 66000 = $9429

c)

Expert Solution

To determine

To find: The process to develop the value for K.

Explanation of Solution

The past data of S, Y, Z and P is required where,

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

to formulate the value of k. However, this data will be utilized by various techniques like regression analysis in order to find the value of k.

d)

Expert Solution

To determine

To detect: The potential weakness of the model is to be determined.

Explanation of Solution

The given model depends on three constituents, Y, Z, and P. Therefore, any change in these consequents will change the value of sales. Moreover, it will be difficult to find the consequent that is responsible to change in sales(S).

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Answer 4

Textbook Question

Chapter 5, Problem 1E

The forecasting staff for the Prizer Corporation has developed a model to predict sales of its air-cushioned-ride snowmobiles. The model specifies that sales S vary jointly with disposable personal income Y and the population between ages 15 and 40, Z, and inversely with the price of the snowmobiles P. Based on past data, the best estimate of this relationship is S = k Y Z P

where k has been estimated (with past data) to equal 100.

If Y = $ 11 , 000 , Z = $ 1 , 200 , and P = $ 20 , 000 , what value would you predict for S?
What happens if P is reduced to $17,500?
How would you go about developing a value for k?
What are the potential weaknesses of this model?

a)

Expert Solution

To determine

To calculate: The value of S (sales).

Answer to Problem 1E

The value of S is $66000

Explanation of Solution

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

S=kYZPS= 100×11000×120020000S= 66,000

b)

Expert Solution

To determine

To ascertain: The effect of decrease in the value of P.

Answer to Problem 1E

The sales will increase by 75429 − 66000 = $9429

Explanation of Solution

S=kYZPS= 100×11000×120017500S= 75428.57S= 75429 (rounded off)

The sales will increase by 75429 − 66000 = $9429

c)

Expert Solution

To determine

To find: The process to develop the value for K.

Explanation of Solution

The past data of S, Y, Z and P is required where,

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

to formulate the value of k. However, this data will be utilized by various techniques like regression analysis in order to find the value of k.

d)

Expert Solution

To determine

To detect: The potential weakness of the model is to be determined.

Explanation of Solution

The given model depends on three constituents, Y, Z, and P. Therefore, any change in these consequents will change the value of sales. Moreover, it will be difficult to find the consequent that is responsible to change in sales(S).

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

a)

Expert Solution

To determine

To calculate: The value of S (sales).

Answer to Problem 1E

The value of S is $66000

Explanation of Solution

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

S=kYZPS= 100×11000×120020000S= 66,000

b)

Expert Solution

To determine

To ascertain: The effect of decrease in the value of P.

Answer to Problem 1E

The sales will increase by 75429 − 66000 = $9429

Explanation of Solution

S=kYZPS= 100×11000×120017500S= 75428.57S= 75429 (rounded off)

The sales will increase by 75429 − 66000 = $9429

c)

Expert Solution

To determine

To find: The process to develop the value for K.

Explanation of Solution

The past data of S, Y, Z and P is required where,

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

to formulate the value of k. However, this data will be utilized by various techniques like regression analysis in order to find the value of k.

d)

Expert Solution

To determine

To detect: The potential weakness of the model is to be determined.

Explanation of Solution

The given model depends on three constituents, Y, Z, and P. Therefore, any change in these consequents will change the value of sales. Moreover, it will be difficult to find the consequent that is responsible to change in sales(S).

Answer 8

a)

Expert Solution

To determine

To calculate: The value of S (sales).

Answer to Problem 1E

The value of S is $66000

Explanation of Solution

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

S=kYZPS= 100×11000×120020000S= 66,000

Answer 9

a)

Expert Solution

Answer 10

a)

Expert Solution

Answer 11

Expert Solution

Answer 12

To determine

To calculate: The value of S (sales).

Answer 13

Answer to Problem 1E

The value of S is $66000

Answer 14

Explanation of Solution

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

S=kYZPS= 100×11000×120020000S= 66,000

Answer 15

b)

Expert Solution

To determine

To ascertain: The effect of decrease in the value of P.

Answer to Problem 1E

The sales will increase by 75429 − 66000 = $9429

Explanation of Solution

S=kYZPS= 100×11000×120017500S= 75428.57S= 75429 (rounded off)

The sales will increase by 75429 − 66000 = $9429

Answer 16

b)

Expert Solution

Answer 17

b)

Expert Solution

Answer 18

Expert Solution

Answer 19

To determine

To ascertain: The effect of decrease in the value of P.

Answer 20

Answer to Problem 1E

The sales will increase by 75429 − 66000 = $9429

Answer 21

Explanation of Solution

S=kYZPS= 100×11000×120017500S= 75428.57S= 75429 (rounded off)

The sales will increase by 75429 − 66000 = $9429

Answer 22

c)

Expert Solution

To determine

To find: The process to develop the value for K.

Explanation of Solution

The past data of S, Y, Z and P is required where,

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

to formulate the value of k. However, this data will be utilized by various techniques like regression analysis in order to find the value of k.

Answer 23

c)

Expert Solution

Answer 24

c)

Expert Solution

Answer 25

Expert Solution

Answer 26

To determine

To find: The process to develop the value for K.

Answer 27

Explanation of Solution

The past data of S, Y, Z and P is required where,

S = Sales

Y = Disposable personal income

Z = population between the age group

P = inverse price

K = estimated data

to formulate the value of k. However, this data will be utilized by various techniques like regression analysis in order to find the value of k.

Answer 28

d)

Expert Solution

To determine

To detect: The potential weakness of the model is to be determined.

Explanation of Solution

The given model depends on three constituents, Y, Z, and P. Therefore, any change in these consequents will change the value of sales. Moreover, it will be difficult to find the consequent that is responsible to change in sales(S).

Answer 29

d)

Expert Solution

Answer 30

d)

Expert Solution

Answer 31

Expert Solution

Answer 32

To determine

To detect: The potential weakness of the model is to be determined.

Answer 33

Explanation of Solution

The given model depends on three constituents, Y, Z, and P. Therefore, any change in these consequents will change the value of sales. Moreover, it will be difficult to find the consequent that is responsible to change in sales(S).