M2S2 – DUCK beer

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Author

László Ketskeméty

Mini Project ID

BMEMPBEER2

Description

After having collected the data (see case 2.1) to answer the final questions (see case 1.3) we should find the way of analysing them.

In order to answer the Preparatory Committee questions with purely mathematical tools, it must use statistical estimation methods to prepare the model of the optimal product structure.

What models should be used?

Sector

VET

Data

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Model

You should use regression methods to predict the future purchase prices of raw materials using trend functions fitted to the available time series. These data will not primarily affect the price of the final product, but the purchase quantity, which in turn will affect the production plan. In addition, it is necessary to estimate with accuracy the maximum quantities of products that can be sold, i.e. the maximum amount of beer and liqueur that can be sold on the market, because oversupply generates a loss. It can be done by taking into account the scale of time of selling. It is worth counting also on minimum quantities to ensure a market presence for the company, as consumers can easily get away with not finding their favourite product in stores.

Rivalry with a competing company should be examined using a game theory model. Using DOVE’s production figures, it is possible to estimate, based on economic laws, how much of the DUCK liqueur would already be unpleasant for the rival, which would ensure market dominance. The so-called estimated data will be able to be taken into account in the constraining conditions of the linear programming task.

As statistical estimates can only be made with a certain degree of accuracy, it is advisable to perform the calculations with several parameter settings, i.e. several models should be set up.

Calculation

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Solution

It is advisable to use “pessimistic”, “optimistic” and “average” estimates. In principle, if random processes develop, the optimistic model provides the greatest profit and benefit. However, this is only worth embracing if the firm have enough reserves to do it. If there are not enough reserves, the model for pessimistic estimates should be chosen.

Presentation

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