Exam 8: Predictive Modeling and Analysis

Use the table below to answer the following question(s). Sujito Electronix makes headphones for $22 and sells them for $32.Sujito has sold at least 50 headphones on average per week in the past, though the actual demand is unknown.Sujito has also often run short of supply in the past.After three months of release, the headphones are sold at 40 percent discount.The spreadsheet below shows Sujito's sales and demand for the headphones.We take demand at 51, and quantity produced at 55. Newsvendor model for Sujito's headphones Data Selling Price \ 32 Cost \ 22 Discount Price \ 19.2 Model Demand 51 Produced Quantity 55 Quantity Sold Surplus Quantity -Calculate the net profit for the headphones.

Use the table below to answer the following question(s). In the spreadsheet below, there is data on the price, demand, quantity produced, and cost for an item.There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $\begin{array} { | l | l | l | l | } \hline 1 & \text { A } & \text { B } & \text { C } \\\hline \hline & \text { Profit Model } & & \\\hline 3 & & & \\\hline 3 & \text { Data } & & \begin{array} { l } \text { What-If Demand } \\\text { Values }\end{array} \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price (\$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost (\$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost (\$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$ -From the "what if" values, calculate the revenue if the demand is 60,000 units.

Use the table below to answer the following question(s). Sheila joined Simsin Tradings at the age of 36 with a starting salary of $75,000.She expects a salary increase of 5 percent every year.Her retirement plan requires her to pay 9 percent of her salary, while the company matches it at 32 percent.She expects an annual return of 7 percent on her retirement portfolio.Using a predictive model for Sheila's first five years, calculate the following, assuming that the salary increases at the same rate every year, and the return of interest does not change. Retirement Plan Model for Sheila Data Retirement Contribution ( percent of salary) Employer Match 9 percent Annual Salary Increase 32 percent Annual Return on Investment 5 percent 7 percent -Which of the following is true of the R-squared (R²)value in Excel's Trendline function?

Use the table below to answer the following question(s). Below is the profit model spreadsheet for the Lazarus Shoe Company producing their latest model of shoes for the month of January. $\begin{array} { | l | l | } \begin{array} { l } \text { Profit Model for Lazarus } \\\text { Shoe Company for } \\\text { January }\end{array} & ( \text { All cost in \$) } \\\hline & \\\hline \text { Unit Price } & 47 \\\hline \text { Unit Cost } & 22 \\\hline \text { Fixed Cost for Production } 350,000 \\\hline \text { Demand } & 40,000 \\\hline & \\\hline \text { Model } & \\\hline & \\\hline \text { Unit Price } & 47 \\\hline \text { Quantity Sold } & 38,000 \\\hline \text { Revenue } & \\\hline & \\\hline \text { Unit Cost } & 22 \\\hline \text { Quantity Produced } & 38,000 \\\hline \text { Variable Cost } & \\\hline \text { Fixed Cost } & 300,000 \\\hline & \\\hline \text { Profit } & \\\hline\end{array}$ -Calculate the variable cost of production.

In predictive modeling, validity refers to how well a model represents reality.

Use the table below to answer the following question(s). Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug.The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to $145,000,000.The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year.The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years.A monthly prescription is anticipated to generate revenue of $420 while incurring variable costs of $150.A discount rate of 8 percent is assumed. $\begin{array}{l}\text { Dresden Pharmaceuticals }\\\begin{array} { | l | l | } \hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit (monthly Rx) revenue (\$) } & 420 \\\hline \text { Unit (monthly Rx) cost (\$) } & 150 \\\hline \text { Discount Rate ( per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D (\$) } & 875,000,000 \\\hline \text { Clinical Trials (\$) } & 145,000,000 \\\hline & \\\hline\end{array}\end{array}$ -Calculate the projected sales for the first year.

Use the table below to answer the following question(s). Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug.The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to $145,000,000.The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year.The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years.A monthly prescription is anticipated to generate revenue of $420 while incurring variable costs of $150.A discount rate of 8 percent is assumed. $\begin{array}{l}\text { Dresden Pharmaceuticals }\\\begin{array} { | l | l | } \hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit (monthly Rx) revenue (\$) } & 420 \\\hline \text { Unit (monthly Rx) cost (\$) } & 150 \\\hline \text { Discount Rate ( per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D (\$) } & 875,000,000 \\\hline \text { Clinical Trials (\$) } & 145,000,000 \\\hline & \\\hline\end{array}\end{array}$ -Calculate the annual cost incurred for the second year.

Use the table below to answer the following question(s). Fiberia Accessories, a clothing retailer, is planning to introduce a new line of sweaters as part of the winter collection for $65 with an inventory of 1500.The main selling season is 60 days between November and December.The store then sells the remaining units in a clearance sale at 65 percent discount.Out of the 60 main retail days, Fiberia sells the sweaters at full retail price for only 45 days, while giving a discount of 25 percent for the remaining 15 days.The demand functions a, and b are given as 79.5 and 1.1 respectively. Marked Down Pricing Model for Fiberia Accessories's new sweater Data Retail Price \ 65 Inventory 1500 Selling Season (days) 60 Days at Full Retail 45 Intermediate Markdown 25 percent Clearance Markdown 65 percent Demand Function a 79.5 b 1.1 -Calculate the total number of units sold during the full retail sales period.

Use the table below to answer the following question(s). In the spreadsheet below, there is data on the price, demand, quantity produced, and cost for an item.There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $\begin{array} { | l | l | l | l | } \hline 1 & \text { A } & \text { B } & \text { C } \\\hline \hline & \text { Profit Model } & & \\\hline 3 & & & \\\hline 3 & \text { Data } & & \begin{array} { l } \text { What-If Demand } \\\text { Values }\end{array} \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price (\$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost (\$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost (\$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$ -________ is the term used by Risk Solver Platform for systematic methods of "what-if" study.

Use the table below to answer the following question(s). Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug.The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to $145,000,000.The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year.The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years.A monthly prescription is anticipated to generate revenue of $420 while incurring variable costs of $150.A discount rate of 8 percent is assumed. $\begin{array}{l}\text { Dresden Pharmaceuticals }\\\begin{array} { | l | l | } \hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit (monthly Rx) revenue (\$) } & 420 \\\hline \text { Unit (monthly Rx) cost (\$) } & 150 \\\hline \text { Discount Rate ( per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D (\$) } & 875,000,000 \\\hline \text { Clinical Trials (\$) } & 145,000,000 \\\hline & \\\hline\end{array}\end{array}$ -Calculate the market size for the second year.

Use the table below to answer the following question(s). In the spreadsheet below, there is data on the price, demand, quantity produced, and cost for an item.There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $\begin{array} { | l | l | l | l | } \hline 1 & \text { A } & \text { B } & \text { C } \\\hline \hline & \text { Profit Model } & & \\\hline 3 & & & \\\hline 3 & \text { Data } & & \begin{array} { l } \text { What-If Demand } \\\text { Values }\end{array} \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price (\$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost (\$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost (\$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$ -Gruten Retailers sells Mother's Day special greeting cards at their store at $6.They make the cards for a dollar apiece.Most of the cards are sold by Mother's Day, but the actual demand is unknown.They have orders for 120 cards.In the past, they have had sales of at least 100 cards by Mother's Day.The remaining cards are sold at a 40 percent discount.Calculate the net profit, if demand, D, is set at 110 units.

Use the table below to answer the following question(s). Sheila joined Simsin Tradings at the age of 36 with a starting salary of $75,000.She expects a salary increase of 5 percent every year.Her retirement plan requires her to pay 9 percent of her salary, while the company matches it at 32 percent.She expects an annual return of 7 percent on her retirement portfolio.Using a predictive model for Sheila's first five years, calculate the following, assuming that the salary increases at the same rate every year, and the return of interest does not change. Retirement Plan Model for Sheila Data Retirement Contribution ( percent of salary) Employer Match 9 percent Annual Salary Increase 32 percent Annual Return on Investment 5 percent 7 percent -Which of the following mathematical functions, used in predictive analytical models, is represented by the formula y = ax³ + bx² dx + e?

Use the table below to answer the following question(s). Below is a room overbooking model spreadsheet for the Metza, a hotel chain.The hotel has 425 rooms priced at $180 per day each, and is usually fully booked.Reservations can be cancelled any time before 5:00 p.m.with no penalty.The hotel estimates an average overbooking cost of $150.Customer demand is set at 400 with an average cancellation of 20. Aotel Overbooking Model for the Metza group of hotels 1 2 3 Data 4 5 Rooms Available 425 6 Price per room \ 180 7 Overbooking Cost \ 150 8 9 10 11 Reservation Limit 425 12 Customer Demand 400 13 Reservation Made 14 Cancellations 20 15 Customer Arrivals 16 Overbooked Customers -Which of the following is the excel formula used to estimate overbooked customers?

Use the table below to answer the following question(s). In the spreadsheet below, there is data on the price, demand, quantity produced, and cost for an item.There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $\begin{array} { | l | l | l | l | } \hline 1 & \text { A } & \text { B } & \text { C } \\\hline \hline & \text { Profit Model } & & \\\hline 3 & & & \\\hline 3 & \text { Data } & & \begin{array} { l } \text { What-If Demand } \\\text { Values }\end{array} \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price (\$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost (\$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost (\$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$ -From the "what if" values, calculate the total profit when the demand is 20,000.

Use the table below to answer the following question(s). Below is the profit model spreadsheet for the Lazarus Shoe Company producing their latest model of shoes for the month of January. $\begin{array} { | l | l | } \begin{array} { l } \text { Profit Model for Lazarus } \\\text { Shoe Company for } \\\text { January }\end{array} & ( \text { All cost in \$) } \\\hline & \\\hline \text { Unit Price } & 47 \\\hline \text { Unit Cost } & 22 \\\hline \text { Fixed Cost for Production } 350,000 \\\hline \text { Demand } & 40,000 \\\hline & \\\hline \text { Model } & \\\hline & \\\hline \text { Unit Price } & 47 \\\hline \text { Quantity Sold } & 38,000 \\\hline \text { Revenue } & \\\hline & \\\hline \text { Unit Cost } & 22 \\\hline \text { Quantity Produced } & 38,000 \\\hline \text { Variable Cost } & \\\hline \text { Fixed Cost } & 300,000 \\\hline & \\\hline \text { Profit } & \\\hline\end{array}$ -Calculate the total profit.

Use the table below to answer the following question(s). Fiberia Accessories, a clothing retailer, is planning to introduce a new line of sweaters as part of the winter collection for $65 with an inventory of 1500.The main selling season is 60 days between November and December.The store then sells the remaining units in a clearance sale at 65 percent discount.Out of the 60 main retail days, Fiberia sells the sweaters at full retail price for only 45 days, while giving a discount of 25 percent for the remaining 15 days.The demand functions a, and b are given as 79.5 and 1.1 respectively. Marked Down Pricing Model for Fiberia Accessories's new sweater Data Retail Price \ 65 Inventory 1500 Selling Season (days) 60 Days at Full Retail 45 Intermediate Markdown 25 percent Clearance Markdown 65 percent Demand Function a 79.5 b 1.1 -What is the average daily sale during the full retail sales period?

In the equation to calculate the economic value of a customer, V = R × F × M/D, how is the value for F estimated?

Use the table below to answer the following question(s). Sheila joined Simsin Tradings at the age of 36 with a starting salary of $75,000.She expects a salary increase of 5 percent every year.Her retirement plan requires her to pay 9 percent of her salary, while the company matches it at 32 percent.She expects an annual return of 7 percent on her retirement portfolio.Using a predictive model for Sheila's first five years, calculate the following, assuming that the salary increases at the same rate every year, and the return of interest does not change. Retirement Plan Model for Sheila Data Retirement Contribution ( percent of salary) Employer Match 9 percent Annual Salary Increase 32 percent Annual Return on Investment 5 percent 7 percent -What's the total retirement balance when Sheila has reached the age of 40 while working with Simsin?

Use the table below to answer the following question(s). In the spreadsheet below, there is data on the price, demand, quantity produced, and cost for an item.There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $\begin{array} { | l | l | l | l | } \hline 1 & \text { A } & \text { B } & \text { C } \\\hline \hline & \text { Profit Model } & & \\\hline 3 & & & \\\hline 3 & \text { Data } & & \begin{array} { l } \text { What-If Demand } \\\text { Values }\end{array} \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price (\$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost (\$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost (\$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$ -Calculate the total revenue when the quantity produced is 55,000 and demand is 60,000.

Use the table below to answer the following question(s). Fiberia Accessories, a clothing retailer, is planning to introduce a new line of sweaters as part of the winter collection for $65 with an inventory of 1500.The main selling season is 60 days between November and December.The store then sells the remaining units in a clearance sale at 65 percent discount.Out of the 60 main retail days, Fiberia sells the sweaters at full retail price for only 45 days, while giving a discount of 25 percent for the remaining 15 days.The demand functions a, and b are given as 79.5 and 1.1 respectively. Marked Down Pricing Model for Fiberia Accessories's new sweater Data Retail Price \ 65 Inventory 1500 Selling Season (days) 60 Days at Full Retail 45 Intermediate Markdown 25 percent Clearance Markdown 65 percent Demand Function a 79.5 b 1.1 -Calculate the daily sales during the discount sales period.