A large food chain owns a number of pharmacies that operate in a variety of settings. Some
Question:
A large food chain owns a number of pharmacies that operate in a variety of settings. Some are situated in small towns and are open for only 8 hours a day, 5 days per week. Others are located in shopping malls and are open for longer hours. The analysts on the corporate staff would like to develop a model to show how a store’s revenues depend on the number of hours that it is open. They have collected the following information from a sample of stores.
a) Use a linear function to represent the relationship between revenue and operating hours and find the values of the parameters using the LSGRG solver that provide the best fit to the given data. What revenue does your model predict for 120 hours?
b) Suggest a two-parameter nonlinear model for the same relationship and find the parameters using the LSGRG solver that provide the best fit. What revenue does your model predict for 120 hours? Which if the models in (a) and (b) do you prefer and why?
Your solutions for (a) and (b) should contain a detailed spreadsheet model (where the decision variables, parameters, objective function and constraints are identified and explained), as well as answers to the questions posed. You should use Microsoft Excel with ASPE to solve.
Statistical Techniques in Business and Economics
ISBN: 978-0078020520
16th edition
Authors: Douglas Lind, William Marchal