Exam 8: Predictive Modeling and Analysis

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 revenue during the discount sales period.

Explain how a two-way data table is created.

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 cost when demand is 40,000.

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 total units sold during the discount sales period.

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 -Which of the following is the value for quantity sold?

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. $\begin{array}{l}\text { Dresden Pharmaceuticals }\\\begin{array} { | l | l | } \hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit (monthly Rx) revenue (\$) } & 420 \\\hline \text { Unit (monthly Rx) cost (\$) } & 150 \\\hline \text { Discount Rate ( per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D (\$) } & 875,000,000 \\\hline \text { Clinical Trials (\$) } & 145,000,000 \\\hline & \\\hline\end{array}\end{array}$ -Which of the following years shows the first profit for Dresden's new drug?

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 will be Sheila's salary in her second year of work at Simsin?

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 net present value for Dresden's new drug.

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 revenue for the clearance sales period.

Give an account of how data is used in predictive models.

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 variable cost when the demand is 60,000 units.

Which of the following ways does demand influence profit?

In predictive analysis models, a second-order polynomial has only one hill or valley.

Blue Sunset Band is planning to record a new album.A major decision to be made is if the band can record the album on their own, or if they should hire a studio to record it with.The fixed cost for recording at the studio is $100,000, plus the manufacturing cost per CD, which is at $5.If they record the album in-house, the cost per CD is $10.They plan to produce 3000 copies of the album regardless of the place of recording.If the band wished to break even with the cost, how can they achieve this by using the Goal Seek feature in Excel?

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 -Calculate the employer contribution in Sheila's fourth year at 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. $\begin{array} { | l | l | l | l | } \hline 1 & \text { A } & \text { B } & \text { C } \\\hline \hline & \text { Profit Model } & & \\\hline 3 & & & \\\hline 3 & \text { Data } & & \begin{array} { l } \text { What-If Demand } \\\text { Values }\end{array} \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price (\$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost (\$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost (\$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$ -Brenton joined the Kroos Corporation at a starting salary of $61,500.According to the company's retirement plan, Brenton has to make a retirement contribution of 6 percent of his salary.The company contributes 30 percent of this amount.Brenton is expected to receive a salary increment of 3.5 percent per year for the next three years.Brenton is also expected to receive an annual investment return of 8 percent on the plan.Assuming the same rate of salary increases and investment returns each year, calculate the total balance of the retirement plan in its 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 revenue for the new line of sweaters.

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 cumulative net profit at the fourth 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. $\begin{array} { | l | l | l | l | } \hline 1 & \text { A } & \text { B } & \text { C } \\\hline \hline & \text { Profit Model } & & \\\hline 3 & & & \\\hline 3 & \text { Data } & & \begin{array} { l } \text { What-If Demand } \\\text { Values }\end{array} \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price (\$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost (\$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost (\$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$ -Which of the following is the Excel formula to determine the number of units sold?

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 revenue during the full retail sales period.