Firm A, a retailer who sells raisins to customers, needs to pick up the optimal retail price of raisins in order to maximize the revenue in the next season. The optimal raisin price should be made based on a precise demand forecasting in the next season. To do the demand forecasting, firm A’s marketing department collects the data of demand and raisin retail price in the past and conducts a regression analysis. Please use the attached data to do the following analysis.

Data of Demand/Price
Price	Demand
$ 18.21	176
$ 18.16	183
$ 12.36	198
$ 18.64	177
$ 19.55	172
$ 10.61	204
$ 15.92	187
$ 12.71	196
$ 17.54	183
$ 12.61	198
$ 16.17	187
$ 12.26	197
$ 10.54	209
$ 19.45	174
$ 12.47	199
$ 11.12	199
$ 18.88	175
$ 17.56	181
$ 15.57	182
$ 18.84	178
$ 10.49	204
$ 11.81	202
$ 14.48	193
$ 10.80	201
$ 16.68	178
$ 16.77	184
$ 11.80	202
$ 10.03	205
$ 10.19	201
$ 19.68	175
$ 11.10	206
$ 19.35	174
$ 12.36	202
$ 18.89	170
$ 15.30	185
$ 12.22	198
$ 14.16	192
$ 13.44	195
$ 17.41	180
$ 19.60	174
$ 19.49	172
$ 16.30	181
$ 13.25	196
$ 12.76	197
$ 13.39	193
$ 16.69	180
$ 17.34	180
$ 11.25	200
$ 12.83	200

1. How can you quantify the relationship between the demand and the price? Given the current retail price is $15, how would you forecast the demand in the next season? Also, describe how precise your demand forecasting analysis is.

2.Assuming firm A has sufficient raisin production capacity to meet all raisin demand, write down firm A’s REVENUE as a function of the raisin retail price. If firm A wants to know the risk in his revenue (for example, the standard deviation of the revenue), please describe how to use simulation measure the risk.

Answer rating: 100% (QA)

To quantify the relationship between demand and price a regression analysis can be performed using the given data In this case the demand can be consi... View the full answer