Premium Essay

Eco 550 Assignment 1 Domino's Pizza

In: Business and Management

Submitted By sylvia143
Words 1241
Pages 5
Making Decisions Based on Demand and Forecasting
Sylvia Evans
Dr. Elkanah Faux
ECO 550
January 27, 2013

Strayer University

In this assignment I will be discussing the t that Domino’s is considering entering the marketplace in my community of Waynesboro, GA. I have conducted research to gather information in regards to demand for this business based on population, average income per household and average cost of pizza in this particular area. The end results of this research and demand analysis we should be able to determine if this would be a wise investment move to make on Domino’s behalf.
Waynesboro is a fairly small town located in Burke County, GA. The current population for this town is about 5,781(www.city-data.com). The median income per household in my city from 2001 to 2011 has ranged from an estimate of about $27,166 to about $31,188 for the current day. The average cost of pizza from other pizza places over the years (2001-2011) ranged anywhere from $5.00 to about $18.00 depending on what you want and how you want it prepared. As far as household sizes they would range from about 1 person to about 5 people on average and the number of pizzas were hypothetically ordered were based on the number of people per household and how much income they were making. The more kids that are in a household the better the chances are of ordering pizza since it is no secret that kids love pizza. Another factor to consider would be single individuals who work long hours and prefer ordering put as opposed to cooking after a long day’s work. All these factors combined will help us determine if Domino’s should start a business in my hometown.
Other variables that are considered are my substitutes which are Subway subs. I chose subs because there are several individuals who are health conscious and would prefer to have something lighter to eat rather than pizza so…...

Similar Documents

Free Essay

Eco 550 Assignment 2

...EXPANSION AND MERGER 1 1. Explain why government regulation is needed, citing the major reasons for government involvement in a market economy. The consolidation of U.S. industry into increasingly powerful corporations spurred government intervention to protect small businesses and consumers. In 1890, Congress enacted the Sherman Antitrust Act, a law designed to restore competition and free enterprise by breaking up monopolies. In 1906, it passed laws to ensure that food and drugs were correctly labeled and that meat was inspected before being sold. In 1913, the government established a new federal banking system, the Federal Reserve, to regulate the nation's money supply and to place some controls on banking activities. The largest changes in the government's role occurred during the "New Deal," President Franklin D. Roosevelt's response to the Great Depression. During this period in the 1930s, the United States endured the worst business crisis and the highest rate of unemployment in its history. Many Americans concluded that unfettered capitalism had failed. So they looked to government to ease hardships and reduce what appeared to be self-destructive competition. Roosevelt and the Congress enacted a host of new laws that gave government the power to intervene in the economy. Among other things, these laws regulated sales of stock, recognized the right of workers to form unions, set rules for wages and hours, provided cash benefits to the unemployed and......

Words: 3731 - Pages: 15

Premium Essay

Eco 550 Assignment 2

...ABSTRACT In earlier times, communities were small and intimate. Personal information was preserved in the memories of friends, family, and neighbors, and it was spread by gossip and storytelling. Today, information is spreading through massive electronic record systems and databases. Privacy become very important and growing concern in every country around the world. Modern computing technologies and the Internet have generated the capacity to collect, manipulate, and share massive quantities of data. In this paper, I will be discussing the advantages and disadvantages of public access to citizens’ private data and other topics on the value of digital privacy.   1. List and describe at least three (3) technologies that allow an individual to research citizens’ private data. Facebook is the largest online social network provider in the United States. Facebook is one of the most-visited Web site in the world with more than 350 million users who provide a lot of personal information such as details about their lives, friendships, interests and activities. Facebook is free and you can connect to anyone in the world. You can share your feelings, be a member of any group, events. You can chat with friends, promote your business. Facebook has some disadvantages such as: privacy – privacy settings is very simplified, people give personal information in video, pictures or text; addiction – people waste most valuable time, what causes many problems; fake profile and ID –......

Words: 968 - Pages: 4

Premium Essay

Eco 550 Assignment 1

...nment Assignment 1 “Making Decisions Based on Demand and Forecasting” Strayer University ECO 5550 – Managerial Economics and Globalization May 12, 2013 Making Decisions Based on Demand and Forecasting There are several demographic and independent variables which are relevant in completing a demand analysis for pizza in Loudoun County, Virginia. The first variable that I used in completing my demand analysis is the average cost per pizza in the Loudoun County, Virginia area. The average cost of pizza is imperative in completing a demand analysis, because consumers in Loudoun County, Virginia have several choices in pizza companies vying for their attention. The second variable that I used was the sales revenue for Domino’s Pizza domestic stores for the quarters ranging from the first quarter of 2010 to the first quarter of 2013. Once I obtained the sales figures for the quarters ranging from the first quarter of 2010 to the first quarter of 2013, I then divided the sales revenue in order to obtain the average sales revenue for each domestic store. In order to complete a demand analysis, and forecasting income for future periods one must be able to know the relationship between the average sales per store, and the consumers who are demanding the product. The third variable that I used in completing my demand analysis is median income for Loudoun County, Virginia. Median income is significant for two reasons; first one can tell if the median income can afford......

Words: 1027 - Pages: 5

Premium Essay

Assignment 2 Eco 550

...Operations Decisions Assignment # 2 August 7, 2013 1. Briefly describe the details of the fictitious business that you created for this assignment. There will be 100 employees who work 20 days each month with a salary of $70 each day. The employees will manufacture 6,000 units of output each month which has a variable costs of $2,000 per day. The fixed costs have not been revealed and we are advised they are "high enough" which the total costs will exceed the corporation’s total revenue. The price of the corporation’s output is $32 and the marginal cost of the last unit is $30. 2. Access the current environmental scan factors. Determine the factors that will have the greatest impact on plant operations and management's decision to continue or discontinue operations. With the information given the main elements of an environmental scan are; the expected time the business anticipates to be in the marketplace (short run vs. long run), the elasticity of demand for the item the corporation manufactures, competition (many firms vs. few firms), and fabrication expenses. Some other trivial elements of an environmental scan reveal the learning curve of employees against experience, turnover, and markets. Time frame is one of the greatest factors with the provided information regarding corporation ABC since the fixed costs were not provided but advised it would be high. This is believed to be a main concern due to the fact that in the short run not all contributions are......

Words: 1223 - Pages: 5

Premium Essay

Eco 550 Assignment 2

...Assignment 2: Operations Decisions ECO 550   Martin Company specializes in designing and creating high end eight-track players for client’s cars. Martin Company caters to the customer who is trying to keep the past alive and thriving. However out dated the eight-track player may be there are still those who believe it is still the best music medium. Be it nostalgia or plain stubbornness Martin Company has carved a niche in the car audio market with its unique and custom eight-track installations. Started in 2007 the company has had its ups and downs and has yet to turn a consistent profit. Due to the lack of profit Martin Company has recently hired a consultant to review their operations and make changes to allow the company to be more profitable. One of the first things the consultant must take into consideration is the current market for customized eight-track players. The company is based in southern California which with its unique combination of nice weather and eccentric wealthy individuals is the only place that the company has been able to establish a foothold. The age range for the average customer of Martin Company is somewhere between 40 and 50. As was stated before these individuals are trying to relive the past while at the same time educate younger music listeners to the history of sound. This is a very small demographic in southern California and the company typically only installs between 2,000 to 2,500 units per quarter. The remaining units that are...

Words: 1117 - Pages: 5

Premium Essay

Eco 550 Assignment 1

...(6.2)    (2.5)   (0.09)   (0.21) Qd= -5200 – 42(500) + 20(600) + 5.2(5,500) + .20(10,000) + .25(5,000) Qd= -5,200 – 21,000 + 12,000 + 28,600 + 2,000 + 1,250 = 17,650 Price of the product elasticity= -42(500/17,650)= -1.19. The price of the microwaveable food product is elastic, meaning that the price of the product will affect the demand. As the price of the product increases, the demand for the frozen microwaveable food will decrease as well as if the price of the microwaveable food decreases, the demand for them will increase. Cross elasticity= 20(600/17,650) = .68. The cross elasticity, or the price of the leading competitive product, is positive, implying that they are substitute products. However, the elasticity is less than 1, which suggests that they are not necessarily good substitutes and the competitor’s price has little impact to the product sales. Per capita Income elasticity= 5.2(5,500/17,650) = 1.62. The product is income elastic. This would indicate that the product is a luxury product and will be responsive to income fluctuations. Advertising elasticity= .20(10,000/17,650) = .11. The product is inelastic with respect to advertising. An increase in advertising will have a very small effect on product sales. For instance, if we increased advertising by 10%, we would only see approximately a 1.2% increase in product sales. =-5200-42*(500) +20*(600) +5.2*(5500) +0.2*(11000) +0.25*(5000) = 17850 Number of Microwaves sold elasticity=......

Words: 1263 - Pages: 6

Premium Essay

Eco 550 Week 3 Assignment 1

...ECO550 Week 3 Assignment 1 ECO 550 Part 1: QD = - 5200 – 42P + 20C + 5.2(I) + 0.20(A) + 0.25(M) By converting the cent values into dollars and by putting the values of Price, competitions, income, Advertisement and number of oven, we shall have the following demand. So 500 cents= 5 Dollar 600 Cents= 6 Dollars QD=-5200-42(5)+20(6)+5.2(5500)+0.2(10,000)+0.25(5000) QD = -5200-210+120+28600+2000+1250 QD = 26,560 units Ep ( Price elasticity of demand) Own price elasticity of demand (ep) = ∂Q∂P×PQ ∂Q∂P = -42, P = 5, Q = 26,560 Own Price elasticity (ep) = - 42 × 526,560 x 100= - 0.79 (approx.) EX (Cross Price elasticity-in terms of competitors’ products) Cross price elasticity (exy) = ∂Q∂Px×PQ ∂Q∂Px = 20, Px = 6, Q = 26,560 Cross price elasticity (exy) = 6 × 2026,560 x 100= 0.45 (approx.) EI (Income elasticity) Income elasticity (eI) = ∂Q∂I×IQ ∂Q∂I = 5.2, I = 5500, Q = 26,560 Income elasticity (eI) = 5.2 × 550026,560 = 1.077 (approx.) EA ( Advertisement elasticity) Advertisement elasticity (eA) = ∂Q∂A×AQ ∂Q∂A = 0.2, A = 10,000, Q = 26,560 Advertisement elasticity (eA) = 0.2 × 10,00026,560 = 0.075 (approx.) EM Supply elasticity Supply elasticity (eM) = ∂Q∂A×MQ ∂Q∂A = 0.25, M = 5,000, Q = 26,560 Suppply elasticity (eA) = 0.25 × 5,00026,560 = 0.047 (approx.) Part 2: Price elasticity of demand Price elasticity is -0.79.  There is negative relationship between price and demand. However, the ratio is less than 1, which means that an......

Words: 1472 - Pages: 6

Premium Essay

Eco 550 Assignment 2

...reduce unit cost of production in order to reduce total cost. It will first depend on objectives set by the management in an attempt to motivate and inspire employees. With the previous analysis showing that the company makes losses, it turns out that management’s efforts are all towards attempts to reduce cost and maximize profits. Cost of production also involves various factors, such as environmental and political factors. The company can be operating in an unfavorable environment characterized by high cost of inputs (Wheeler, 2009). The most favorable way of continuing operations will then include an attempt to minimize production margins to a level that accommodates what the company can offer, in terms of inputs. Recommendations 1. The company can increase its turnover as one efficient way of improving profitability. This comes from the fact that there is no limit to sales; whereas reducing cost always has some limits. Increased turnover guarantees the company profits and sales at any point in time. There is a variety of strategies, which may increase the company’s turnover, and they include; investing resources in increasing sales volume, looking for new markets and distribution channels, retain existing customers, sell actively, and attempt to maximize the value of sales (Wheeler, 2009). 2. The company can also achieve profitability by continuously staying focused (Kalb, 1992). Despite cost exceeding revenues, management can still focus its awareness on......

Words: 1291 - Pages: 6

Premium Essay

Eco 550 Week 3 Assignment 1

...Demand Estimation | [Type the document subtitle] | | Professor: Dr. Camille Castorina | | ECO 550: Managerial Economics and Globalization | 7/21/2014 | | In this assignment we will look at a certain scenario that involves estimating the demand of a product when certain variables are put into place. So first thing is understanding what is demand and how does it apply in Economics. “The law of demand states that when the price of a good rises, the amount demanded falls, and when the price falls, the amount demanded rises. Economists have considered this thoroughly and have developed a measure of the degree of cutback, which they call the “elasticity of demand.” The elasticity of demand is the percentage change in quantity demanded divided by the percentage change in price.” “The greater the absolute value of this ratio, the greater is the elasticity of demand. When there is a close substitute for one firm’s brand, for example, a small percentage increase in that firm’s price may lead to a large percentage cut in the amount of the firm’s good demanded. In such a case, economists say that the demand for the good is highly elastic. On the other hand, when there are few good substitutes for a firm’s product, the firm might be able to raise its price substantially with only a small decrease in the quantity demanded resulting. In such a case, demand is said to be highly inelastic” (Henderson,. D 2008). Now let’s look at converting all price values into......

Words: 876 - Pages: 4

Premium Essay

Eco 550 Assignment 1

...Demand Estimation Jasmine P ECO 550 Professor Sumadi May 3, 2015 Compute the elasticities for each independent variable. Note: Write down all of your calculations. QD = - 5200 - 42P + 20PX + 5.2I + .20A + .25M P = 500 PX = 600 I = 5500 A = 10,000 The quantity demanded is calculated as: Qd = -5200 – 42(500) + 20(600) + 5.2(5500) + 0.2(10000) +0.25(5000) = 17,650 Calculate Price Elasticity: Price Elasticity = (P/Q) * (Dq/Dp) = (500/17650) * (-42) = -1.19 Calculate other independent variables: Cross Price Elasticity, Epx = (600/17650) * (20) = 0.68 Income Elasticity, EI = (5500 / 17650)* (5.2) = 1.62 Advertisements Elasticity, EA = (10000 / 17650)* (0.20) = 0.11 Micro-oven Elasticity, EM = (5000 / 17650)* (0.25) = 0.07 Determine the implications for each of the computed elasticities for the business in terms of short-term and long-term pricing strategies. Provide a rationale in which you cite your results. Since the price elasticity is -1.19, this is considered a luxury good. The demand for this product is elastic indicating a 1% increase in the price. Long-term, hopefully this doesn’t stir customers away being that the price increased. Cross-price elasticity is 0.68, which means that any increase in price of the competitor’s widget will increase by 1% and the demand will increase by 0.68%. This is inelastic to the company since the competitor’s widget has no effect on the company’s sales in the long-term. Advertisement elasticity is 0.11...

Words: 919 - Pages: 4

Premium Essay

Eco 550 Assignment #2

... Shavon L. Toles Strayer University Managerial Economics and Globalization Assignment #2 Dr. Camille Castorina May 18, 2015 There are many all natural hair care products available in the market today. With the rise in income people can afford an easier lifestyle therefore there has been a change in the haircare style of people. People now use all natural ingredients in place of traditional hair care methods. With rise in these all natural ingredient, the rise in all natural hair care products also occurred. With so many varieties and products available one can easily target upon a healthy choice of hair care products. A healthier option of hair care products is one which compromises of a good source of nutrients to your hair. Some of the competitors’ options are manufactured by SheaMoisture and Au Naturale. Both of them are the competitors in the market of all natural hair are products. Consumer behavior is dependent upon the gender, age, educational, social and economic background of the people. When we have a look at the consumer behavior of the all natural hair care industry we should first study the target consumers. Our target would be on the buying and purchasing power of the consumer. Our sales would also be determined on the sale of all natural ingredients. The more number of all natural ingredients users there will be more demand for all natural hair products. The taste and educational background of the consumers would also affect the sales. Since...

Words: 1424 - Pages: 6

Premium Essay

Eco 550 Assignment 1

...ECO 550: Assignment 1: SUMMARZIED SOLUTION Q1) The demand equation is given as follows: QD = -5200 -42P +20Px +5.2 I +0.2 A + 0.25 M Now, we substitute the values provided in the question in the equation above, which yields QD = -5200 -42P +20Px +5.2 I +0.2 A + 0.25 M = -5200 -42($5) +20($6) +5.2($5,500) +0.2($10,000) +0.25(5000) = -5200 -210 +120 +28,600 +2000 +1250 QD = 26,560 The different elasticities are calculated as follows: (Own) Price Elasticity of Demand ((Ep ) = ∆Q x P ∆P Q = -(42) x ($5) [Substituting price for low-calorie frozen food is 500 cents or $5] 26560 [Substituting quantity demanded (Q) =26560] = -0.0079 [implying the demand for microwavable food is extremely inelastic] Cross Price Elasticity of Demand (EX) = ∆Q x P ∆P Q = +(20) x ($6) [Substituting price for productx-competitor’s food is 600 cents or $6] 26560 [Substituting quantity demanded (Q) =26560] = +0.0045 [implying the demand for......

Words: 1287 - Pages: 6

Premium Essay

Domino's Pizza

...5 12 - 00 4 REV: MARCH 19, 2012   "One time permission to reproduce granted by Harvard Business Publishing, 10/9/2012" DAVID E. BELL PHILLIP ANDR EWS MARY SHE LMAN Domino’s Pizza Before 2007, wheat prices didn’t have a pulse. We’d buy for the next six months and the price would be plus or minus 10 cents a bushel over the last six months. Then one day in 2008 wheat shot up $24 a bushel! Now, as a norm, we strategically consider corn, dairy, and wheat to better leverage our supply chain expertise and improve store economics. — John Macksood, executive vice president, Domino’s Pizza On the morning of August 22, 2011, John Macksood, executive vice president for supply chain services at Domino’s Pizza, Inc. (Domino’s), was reading the daily headlines while sitting in his office at the Domino’s World Resource Center, the company’s global headquarters in Ann Arbor, Michigan. Domino’s was the world’s second-largest pizza company and the largest pizza delivery quick-serve restaurant (QSR) chain. One item in particular jumped out at Macksood. An article, titled “Quiznos chain faces tough finance issues,” indicated that Denver-based Quiznos, a privately owned QSR sandwich company with 4,000 U.S. stores, was nearing bankruptcy due to “sharpening competition, waning sales, and debt woes.”1 One of the problems cited was Quiznos’ “protracted battle” with its franchisees over operating costs and profitability, with some franchisees blaming low or nonexistent......

Words: 11553 - Pages: 47

Free Essay

Eco 550 Assignment 2

...MKT500: Assignment #2 DéAndre Liggans Strayer University Dr. John Karaffa July 25, 2011 As a mobile Disc Jockey I travel with a portable sound system, playing recorded music at a variety of different events and I offer several different products and services. BIG LIGG ENTERTAINMENT Mobile DJ Service offers the following services: Live Disc Jockey Entertainment Services at Weddings, Community events, House Parties, Cookouts, Formal/Informal Dances and just added Sound system rentals to other Disc Jockeys. BIG LIGG ENTERTAINMENT Mobile DJ Service also offers Compact Discs (CD’s) for events consisting of the music chosen by its customers. For Wedding receptions BIG LIGG ENTERTAINMENT Mobile DJ Service offers compact discs with a picture of the Bride and Groom, date of the event and a special salutation to the guest and wedding party, also consisting of music chosen by the Bride and Groom. I have recently reached out to other Disc Jockey’s who service similar gigs as myself offering to add their services with mine when marketing my services in order to broaden the target market. In doing this, we share ideas, and we pass on leads to one another. One of the Disc Jockeys specializes in Karaoke Entertainment and in promoting and booking services such as his and charging a small finder’s fee for me, BIG LIGG ENTERTAINMENT Mobile DJ Service is constantly producing a profit as with renting my sound system equipment to other Disc Jockeys. Finally, and this is probably one......

Words: 1518 - Pages: 7

Premium Essay

Eco 550 Assignment 3

...Assignment 3 1. Some games of strategy are cooperative. One example is deciding which side of the road to drive on. It doesn’t matter which side it is as long as everyone chooses the same side. Otherwise, everyone may get hurt. a. Does either player have a dominant strategy? Explain. I don’t believe that either player has a dominant strategy. Dominant strategy is “a strategy that results in the best outcome or highest payoff to a given player no matter what action or choice the other player makes” (Farnham, 2010, p. 233). If both drivers stay on their side of the road, they both pass each other safely. If one driver drives on the wrong side of the road, they both lose. If both drivers drive on the wrong side of the road, they will pass each other safely. So, in all scenarios, a given player will not have any dominant strategy. b. Is there Nash equilibrium in this game? Explain. I do believe that there is Nash equilibrium in this game. Nash equilibrium is “a set of strategies from which all players are choosing their best strategy, given the actions of the other players” (Farnham, 2010, p. 234). The driver will drive on the correct side of the road because this is their best strategy, assuming that the other driver is using their best strategy. c. Why is this game called a cooperative game? I believe that this game is a cooperative game because if one or both players don’t cooperate, then neither player wins. Cooperative oligopoly models are......

Words: 493 - Pages: 2