Case study: Estimate the demand for Pizza Firm in UAE

This is an individual case study. Read the case carefully use all the information available in the case to answer the given questions. All questions must be answered with proper explanation using theoretical relationship. Student is expected to use Excel Solver to calculate regression equation and the print out of the results to be attached as annexure. Use the results to analyze the case. Submit the case study through turnitin and attach the report. Plagiarism must be less than to be accepted.

Case study: Estimate the demand for Pizza Firm in UAE:

Pizza HUB company in UAE one of the firm which delivers pizza and serves the major towns in UAE. The Manager of the Pizza firm knows that his customers from the cross segments by nationalities ranging from Asian expatriate community, Arab expatriates and other nationalities are rather price-conscious. Cultural factors observed among these nationalities have different characteristics towards buying pizzas, accessibility, occasions, birthday, get together and other important among the youngsters Pizza buyers in UAE pay close attention to the price charged for a home delivered pizza and the price charged by the competitor.
The manager decides to estimate the empirical demand function for the firms Pizza. Manager collects data on the last 24 months of Pizza sales from the records of the company. The details of the data collected are price that is charged for the time period and price charged by competitors. The manager also managed to collect average household income figures from the UAE statistics sources. The other competitor in Pizza range whose price is also collected, other competitors who sells fast food products in the same range is McDonald’s, therefore the manager also got the prices for Big Mac for the last 24 months from the advertisements in old newspapers. He adjusts the price and income data for the effects of inflation by deflating the currency figures using a deflator obtained from the survey of current UAE statistics website. To measure the number of buyers in the market area (N), he collected data on the number of residents in UAE. Since the number of residents had not changed much during the last 24 months, he has dropped N from the specification of the demand.
The data collected is presented below:

Number of months   Quantity   Prices of    M: income   Price of competitors Pizza    Price of BMac
1   26590   31.57   93.075   38.507   4.56
2   28700   31.57   93440   38.1425   4.927
3   28750   31.57   93805   37.777   5.67
4   28490   31.57   94790.5   37.595   3.98
5   28420   31.57   94790.5   37.595   3.47
6   28160   31.57   94790.5   37.412   3.47
7   30390   27.375   94790.5   37.412   3.10
8   30590   27.375   94717.5   37.047   4.197
9   30400   27.375   94717.5   36.5   4.562
10   30900   27.375   95338   36.5   6.387
11   29340   31.025   95338   37.412   6.387
12   29420   31.025   95338   37.412   6.75
13   28340   31.025   95630   35.587   5.475
14   25170   36.46   96177.5   35.587   4.015
15   25030   36.46   96542.5   35.222   3.832
16   25020   36.46   26350   35.04   4.56
17   25570   37.41   26850   36.64   2.0075
18   25860   37.41   27350   37.376   2.0075
19   26230   37.41   27350   37.23   4.197
20   26330   35.58   27950   36.5   4.197
21   27210   35.58   28159   36.865   2.0075
22   27290   35.58   28264   36.865   2.0075
23   27910   35.58   27444   36.865   4.38
24   28210   35.58   28500   37.41   4.38

From the above data:
1.   Explain Fast food buying behavior in UAE? What are the important factors, you observed while buying, influence the purchases among various nationalities in UAE.
2.   Establish the regression demand equation to estimate and explain the results after running regression analysis.
3.   The manager decides to calculate estimated demand elasticities, observe the results for price elasticity, income elasticity and cross elasticity and explain the results of elasticity under each type of elasticity and the nature of market.
4.   How are the competitors Pizza and Big Mac performing in terms of sales?
5.   Estimate the demand for Pizza Hub considering price of pizza is raised to AED 33.03, incomes rise to AED 97236, the competitor’s prices rise to 36.938 and price of Big mac is 4.197.
6.   Treating the months as time period forecast the demand for the 40th month.