This multi tab excel document presents independant variables and calculates the variable's impact on a business venture. In this example, the problem presented is whether Dominos Pizza should invest in a location in Clarksdale, Mississippi. There are also write ups explaining the data and charts presenting the forcasting. This document used information from the national census bureau.
¶ … Decisions Based on Demand and Forecasting
When considering whether to open a pizza business in an area where a particular business does not already exist there are many independent variables that must be considered. The primary variable to consider is whether the population density can justify a single location to service the entire area. This is important in determining the average amount of customers that may be drawn to the location. Additionally, by evaluating this variable over a long course of time, such as the last five decades, it can be determined as to whether the community is growing consistently or declining. The second variable that is important to consider is the amount of growth and development in the community. A healthy community will consistently have more homes and offices being built. A community that is stagnant and under hard economic times will have inconsistent if not declining development. This also is an indicator of the overall wealth of the community, and since this would be a restaurant location, it is important to consider entering an area that is growing and will be more likely to spend their money on dining.
When calculating the regression and coefficient of determination, the goal is to compare two factors and determine their overall correlation. Typically the first factor is time, given that time always increases. The second factor is the independent variable being evaluated. The coefficient for determination of the population of the area is 46%. This correlation indicates that there is a high correlation between time and population. However, the correlation is this case is negative, as can be seen in the chart below.
The correlation coefficient for the overall amount spent on building and development of the community is 15%. The correlation between time and amount spent is not very close. In fact, the development appears to be highly sporadic at best. Below is a chart that represents the obtained data.
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