Scenario Analysis (return to DSS home)
Managers of our firm would also like to do some scenario analyses to see what happens when the industry averages change. We will hold our firm's price and advertising constant at 356.8 and 140000. We will look at the averages, the best and worst cases in history, and some extreme cases.
Average scenario for the firm:
Industry Average Price = 363
Industry Average Advertising = 110000
Firm Demand = 3317
Market Share - 10.5%
Best case scenario for the firm:
Industry Average Price = 366
Industry Average Advertising = 105000
Firm Demand = 3589
Market Share = 12.3%
Worst case scenario for the firm:
Industry Average Price = 360
Industry Average Advertising = 115000
Firm Demand = 2967
Market Share = 8.7%
Scenario if our product was endorsed by the President:
Industry Average Price = 368
Industry Average Advertising = 102000
Firm Demand = 3728
Market Share = 13.5%
Scenario if our product became obsolete:
Industry Average Price = 354
Industry Average Advertising = 122000
Firm Demand = 2063
Market Share = 5.4%
Descriptive Statistics:
|
|
Firms Demand |
Market Share |
|
Average Case |
3317 |
10.5 |
|
Best Year |
3589 |
12.3 |
|
Worst Year |
2967 |
8.7 |
|
President Endorsed |
3728 |
13.5 |
|
Obsolete |
2063 |
5.4 |
After
these scenarios were considered, it was useful to the managers to calculate the
descriptive statistics for the firm demand and the market share.
Firm Demand
|
Mean |
3132.8 |
|
Standard
Error |
297.3443 |
|
Median |
3317 |
|
Standard
Deviation |
664.8821 |
|
Range |
1665 |
|
Minimum |
2063 |
|
Maximum |
3728 |
Market Share
|
Mean |
10.08 |
|
Standard
Error |
1.42492105 |
|
Median |
10.5 |
|
Standard
Deviation |
3.18622033 |
|
Range |
8.1 |
|
Minimum |
5.4 |
|
Maximum |
13.5 |