STEP 3 SELECTING OF
THE DEMAND FUNCTION AFTER SETTING THE VARIABLES AND THE COLLECTION OF PAST
DATA, THE NEXT STEP BEFORE FINALLY COMPILING EVERYTHING IS TO DETERMINE THE
COMPLETE DEMAND FUNCTION. WHICH IS THE DEPENDENT OR THE VARIABLE THAT IS TO BE
PREDICTED.
THE FACTORS THAT EFFECT THIS ARE THE VARIABLES THAT WERE DEFINED IN
THE FIRST STEP. THE DEMAND FUNCTION CAN BE OF LINEAR OR IN LOGARITHMIC FORM,
BOTH OF THEM ARE DISCUSSED INDIVIDUALLY BELOW. LINEAR INVOLVES FINDING THE LINE
OF BEST FITS BETWEEN TWO OR MORE VARIABLES, THUS BY INPUTTING ONE OR MULTIPLE
VARIABLES OTHER VARIABLE CAN BE THESE COEFFICIENTS ARE RESPONSIBLE FOR THE
AMOUNT OF CHANGE AS WELL AS THE NATURE OF THE CHANGE (POSITIVE OR NEGATIVE) FOR
EXAMPLE IN THE ABOVE EQUATION EFFECT OF INCOME, ADVERTISEMENT AND SUBSTITUTE
WILL HAVE A POSITIVE EFFECT ON BETWEEN THE OVEN TEMPERATURE AND SHELF LIFE OF
COOKIES BAKED IN THOSE OVEN OR A COMPANY OPERATING A CALL CENTER MAY WISH TO
KNOW THE RELATIONSHIP BETWEEN THE WAIT TIMES OF CALLERS AND THE NUMBER OF
COMPLAINS THAT THEY RECEIVE STRENGTH CAN BE PREDICTED AND ANALYZED USING
DIFFERENT FACTORS, WHEREAS IN BIOLOGICAL SCIENCE MEASURING THE BODY MASS AND
COX ENZYME ACTIVITY IN A SAMPLE OF FEW DIFFERENT SPECIES OF SMALL MAMMALS ARE
ALL DONE USING THIS EXACT SAME METHOD.
BY USING REGRESSION ANALYSIS IN VAST
NUMBER OF DISCIPLINES IT BECOMES EASIER TO PREDICT AND ESTIMATE THE BEHAVIOR OF
THE STRUCTURES OR FORECAST THE DEMANDS OF A PRODUCT, THIS METHOD HELPS GENERATE
ACCURATE RESULTS AND ANALYZE THE FACTORS EFFECTING IT DIRECTLY OR INDIRECTLY BY
SUMMARIZING LARGE NUMBER OF DATA AND CALCULATING THE RESULTS, WHICH FOR IN SOME
CASES ARE OF HIGH IMPORTANCE AND CAN CHANGE THE OUTCOME OF THE ORGANIZATIONS.
CONCLUSION AND SUMMERY IN THIS ARTICLE WE HAVE DISCUSSED ABOUT REGRESSION
ANALYSES AND SEEN HOW IT IS USED TO EXAMINE THE RELATIONSHIP BETWEEN TWO OR MORE
VARIABLE, THE DEPENDENT (PREDICTOR) AND THE INDEPENDENT (RESPONSE)VARIABLE, AND
THEN STUDIED WHY THIS IS WIDELY USED FOR PREDICTING OR ESTIMATING THE OUTCOMES
IN VARIOUS FIELDS. PLUS, WE HAVE ALSO WENT THROUGH STEP BY STEP METHOD TO USE
FAR CONSIDERED THE BEST TECHNIQUE FOR PREDICTING THE OUTCOME OF VARIOUS MODELS
AND IS TODAYS MANAGERS BELIEVES IT TO BE AN INDISPENSABLE TOOL.
REFERENCES HTTP://WWW.PURCHASESMARTER.COM/ARTICLES/119
HTTP://LEARNECOMOMICSONLYBIOLOGY..QUEENSU.CA/RCADEMICS/UNDERGRADUCATE/RESOURCES-FOR-COUSES/ANALYZING-DATA/CORRELATION-AND-REGRESSION/
,ZDA = F(PZ, Y, A, PS, PC) WHERE, ZDA = DEMAND FOR COMMODITY A PRICE OF
COMMODITY A (PZ) CONSUMER INCOME (Y) ADVERTISING EXPENDITURE INCURRED ON
COMMODITY Z (A) PRICES OF SUBSTITUTE (PS) PRICES OF COMPLEMENT (PC) NOTE THAT
THESE VARIABLES CAN HAVE BOTH POSITIVE AND NEGATIVE EFFECTS ON THE DEMAND THAT
IS EXPLAINED THAT ARE TO BE SELECTED SHOULD HAVE A SIGNIFICANT IMPORTANCE ON
THE DEMAND THAT COMMODITY AND WHEREAS THE USE OF TOO MANY VARIABLES AND
UNIMPORTANT FACTORS SHOULD BE OVERLOOKED, BELOW IS AN EXAMPLE OF WHAT’S STATED
ABOUT WHEN A CERTAIN BRAND OF CLOTHING IS PREDICTING THE DEMAND OF THEIR
PERSONAL PRODUCT FACTORS LIKE WEATHER CONDITIONS, AND PEOPLE’S INCOME PLAY AN
IMPORTANT ROLE IN THE ANALYSIS. ASIDE FROM THAT IF A HIGH PRICED COMMODITY LIKE
HOUSING IS CONSIDERED THEN FACTORS SUCH RS CREDIT ACCOUNTS AND INTEREST PLAY A
VITAL ROLE.
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