Business Campaign Plan: Mailing
Essay by seve • October 10, 2015 • Creative Writing • 267 Words (2 Pages) • 1,304 Views
You are a vice president of finance for Captain Jack’s Restaurant, a chain of 24 restaurants on the Gulf Coast, including five restaurants in California. The company is considering a plan whereby customers will be mailed coupons in the month of their birthday, entitling them to 30 percent off their total bill. The cost of the mailing (printing, paper, postage, etc.) is estimated to be $550,000. You estimate that the campaign will result in an annual increase in sales of $3,000,000 at normal prices.
Total monthly operating costs on sales using data from the past year are provided below.
Operating Costs | Sales | |
January | $ 3,809,720 | $ 4,141,000 |
February | 3,850,000 | 4,065,000 |
March | 3,969,000 | 4,410,000 |
April | 4,007,225 | 4,502,500 |
May | 3,895,000 | 4,750,000 |
June | 4,221,240 | 4,852,000 |
July | 4,343,200 | 4,880,000 |
August | 4,177,360 | 4,747,000 |
September | 4,070,000 | 4,625,000 |
October | 4,035,600 | 4,484,000 |
November | 3,795,850 | 4,265,000 |
December | 4,105,200 | 4,665,000 |
$ 48,279,395 | $ 54,386,500 |
(a.) Perform regression analysis for Captain Jack’s.
SUMMARY OUTPUT | ||||||||
Regression Statistics | ||||||||
Multiple R | 0.839596802 | |||||||
R Square | 0.70492279 | |||||||
Adjusted R Square | 0.675415069 | |||||||
Standard Error | 97375.78793 | |||||||
Observations | 12 | |||||||
ANOVA | ||||||||
| df | SS | MS | F | Significance F | |||
Regression | 1 | 2.26521E+11 | 2.26521E+11 | 23.8894352 | 0.000634652 | |||
Residual | 10 | 94820440748 | 9482044075 | |||||
Total | 11 | 3.21341E+11 |
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| Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | Lower 95.0% | Upper 95.0% |
Intercept | 1617476.445 | 493020.2996 | 3.280750197 | 0.00827844 | 518958.7607 | 2715994.129 | 518958.7607 | 2715994.129 |
Sales | 0.530824334 | 0.108604516 | 4.887681986 | 0.000634652 | 0.288838394 | 0.772810275 | 0.288838394 | 0.772810275 |
(b.) Write out the cost function.
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