Mr. John operates a medium size business that sells tires. He buys most of his tires from a company that is located in South America. Mr. John believes that he is stocking too much tires so he decided to look into the situation. He wants to use the Economic Order Quantity (EOQ) model to manage his stock of tires. In order to use this model, he must first of all forecast the annual demand for his tires. Using a numerical example, demonstrate to Mr. John how he can use the manual trend projection method of forecasting to forecast demand for the next two years.

Mr. John operates a medium size business that sells tires. He buys most of his tires from a company that is located in South America. Mr. John believes that he is stocking too much tires so he decided to look into the situation. He wants to use the Economic Order Quantity (EOQ) model to manage his stock of tires. In order to use this model, he must first of all forecast the annual demand for his tires. Using a numerical example, demonstrate to Mr. John how he can use the manual trend projection method of forecasting to forecast demand for the next two years.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter1: Introducing The Economic Way Of Thinking

Section1.A: Applying Graphs To Economics

Problem 6SQ

See similar textbooks

Similar questions

You own the only pharmacy in the small town of Jackson City, which has 40,000 residents. You would like to get a sense of what the local demand is for seasonal allergy medicine so you can determine how many packages to keep in stock and what price to charge. You conduct a survey of four residents of Jackson City, asking them about the quantity of allergy medicine they would buy each allergy season at various prices. Their responses are shown in the accompanying table. Estimate and graph the demand for the entire town of Jackson City. Price Lee June Carlotta Eric $8 8 5 6 9 $10 6 4 5 5 $12 4 3 4 3 $14 2 2 2 1 $18 0 1 1 0
You own the only pharmacy in the small town of Jackson City, which has 40,000 residents. You would like to get a sense of what the local demand is for seasonal allergy medicine so you can determine how many packages to keep in stock and what price to charge. You conduct a survey of four residents of Jackson City, asking them about the quantity of allergy medicine they would buy each allergy season at various prices. Their responses are shown in the accompanying table. Estimate and graph the demand for the entire town of Jackson City. Price Lee June Carlotta Eric $8 8 5 6 9 $10 6 4 5 5 $12 4 3 4 3 $14 2 2 2 1 $18 0 1 1 0 I submitted this question earlier and I understand how to add up the market demand for each individual but I don't understand how to estimate the entire market demand for Jackson city which has 40,000 residents including the individuals listed in the chart. If you could please answer this specifically I would appreciate it.
As the selling price of a product increases, demand decreases. Fewer people will buy a product if it is more expensive. This is a very important concept. The demand equation for new iSmarts is given by 0.025x , where p is the unit p = 100 price (in dollars) of the iSmart and x is the number of units produced. We can determine the total revenue (money earned for selling x iSmarts) by multiplying the number of items we sell, x and the price p. The total revenue obtained by producing and selling x iSmarts is given by = xp 100x – 0.025x². It makes sense that this function is quadratic. The company can price the iSmarts so high that no one will buy them and the revenue will be zero. The can also set the price to $0, but the revenue will still be $0, no matter how many iSmarts they "sell". In between, the graph is a parabola opening downward. Determine prices p that would keep revenue above 6530 dollars. Give your answers to 2 decimal places. The revenue will be above 6530 if price is…
The Fearless Champions Outdoor Company is a catalogue sales operation that specializes in outdoor recreational clothing. Demand for its items is very seasonal, peaking during the holiday season and during spring. It has accumulated the following data for order per quarter (their seasons) during the past 3 years (year 3 being the most recent). First determine the demand for year 4 (next year) using the Least Squares method. What is the seasonal demand for the fourth quarter of year 4? Note: Orders are in the 1000's Year Quarter 1 1 38 2 3 4 8888 34 29 56 3428N 33 52 3 40 45 44 75 75.71 79.89 72.02 Fearless! Just like the Red Raiders! 77.67
Setting: U.S. Auto manufacturers are trying to develop a multivariate function with which to estimate the demand for their gas-electric hybrid compact cars. Here is one that Motors General developed for its Jolt: Qj = 65000 – 20Pj + 20Pf + 35Pt – 5Pb + 0.2Tc + 0.05Y + 10Mg + 0.04A Where Qj = the number of Jolts demanded per week. Pj = the price of each new Jolt (in $). Pf = the price of each new Ford gas-electric hybrid (in $). Pt = the price of each new Toyota gas-electric hybrid (in $). Pb = the price of replacement batteries for the Jolt (in $). Tc = the amount of tax credit incentive offered with the purchase of a new hybrid (in $). Y = average weekly disposable income of a typical Jolt purchaser (in $). Mg = the miles per gallon of gas rating of the Jolt (in miles per gallon). A = average weekly Jolt advertising expenditure (in $). 6 If all variables remain unchanged except that the price of the Toyota hybrid (Pt) decreases by $500, then the demand for Jolts will: 7…
The following data was collected to explore how the number of square feet in a house, the number of bedrooms, and the age of the house affect the selling price of the house. The dependent variable is the selling price of the house, the first independent variable (x1) is the square footage, the second independent variable (x2) is the number of bedrooms, and the third independent variable (x3) is the age of the house. Effects on Selling Price of Houses Square Feet Number of Bedrooms Age Selling Price 2750 5 14 296600 2696 5 11 294400 2523 4 7 281400 2057 4 7 240600 1797 4 5 208600 1767 4 5 196400 1684 4 4 171900 1554 3 4 162800 1521 3 3 144900 Copy Data Step 2 of 2: Determine if a statistically significant linear relationship exists between the independent and dependent variables at the 0.01 level of significance. If the relationship is statistically significant, identify the multiple regression equation that best fits the data, rounding the answers to three decimal places. Otherwise,…
The following data was collected to explore how the number of square feet in a house, the number of bedrooms, and the age of the house affect the selling price of the house. The dependent variable is the selling price of the house, the first independent variable (x1) is the square footage, the second independent variable (x2) is the number of bedrooms, and the third independent variable (x3) is the age of the house. Effects on Selling Price of Houses Square Feet Number of Bedrooms Age Selling Price 2756 4 14 310300 2721 4 12 291500 2666 4 8 281100 2102 4 7 265600 1880 3 7 237500 1829 3 6 184600 1599 3 4 160800 1422 3 3 132600 1199 3 3 130500 Step 1 of 2: Find the p-value for the regression equation that fits the given data. Round your answer to four decimal places. Copy Data
The Xhang Corporation operates five clothing suppliers in China to provide merchandise for Nike. Nike recently sought information from the five plants. One variable for which data was collected was the total money (in U.S. Dollars) the company spent on medical support for its employees in the first three months of the year. Data on number of employees at the plants are shown. These data are as follows: Medical $7,400 $14,400 $12,300 $6,200 $3,100 Employees 123 402 256 109 67 (a). Compute the weighted mean medical payment for these five plants using number of employees as the weights. (b). Explain why Nike would desire that a weighted be computed in this situation rather than a simple numeric average Answer all questions
What are the properties of Ordinary Least Squares (OLS) estimators in basic econometrics? Discuss. (Maximum 250 words)
The multivariate demand function below will be needed for questions 12-18. Setting: Grapple, Inc. is a leading seller of laptop personal computers. However, they want to become a leading tablet seller, too. Your marketing department, aided by your economics staff, has estimated a function to help you in the quest for market leader in tablets. The variables are defined after the function. Qg = the number of Grapple tablet computers demanded per week. Pg = the price of each new Grapple tablet (in $). Ph = the price of each Hewpaq tablet (in $). Pr = the price of each Ronova tablet. Pdv = the price to equip a tablet with Holographic digital video (in $, this is an upgrade option that enables three-dimensional graphics on a tablet. Two-dimensional graphics is standard equipment). Psc = the price of various screen sizes (in $, a 8 inch is standard, but upgrade options are 10 inch extra sharp, 12 inch, 12 inch extra sharp, Each also has a touch-screen option. The upgrades…
A researcher wants to study about the behaviours of postgraduate students in Australia in mobile phone usage. One of the goals of the study is to analyse whether there is a relationship between the type of apps that the students use the most and the degree they are studying. What is the most suitable graph to see the relationship described above? Why?
Econometrics Thomas Eisensee and David Stromberg wanted to measure how much news coverage of a foreign disaster impacted the amount of disaster relief provided by the U.S. government. They argue that the simple relationship would be biased. Let X = Minutes of News Coverage and Y= Disaster Aid. Choose a variable X2 that could bias the simple relationship. This variable should impact the amount of coverage and impact the amount of aid for reasons other than purely news coverage. Eisensee and Stromberg introduce an instrument Z = During the Olympics. Explain how Z could satisfy the relevant and exogenous criteria. Explain how you could use Z to estimate the impact of X on Y free from X2 bias. Hint: you should mention two stages.