Demand Estimation

Dependent variable Independent Variable

Stages Demand For O.D interest rate of Income of the Self-employment
current accounts Current Account Customer loans interest rate
Before the pandemic 475 1.5 12 1.8
st
1 Wave 175 1.35 14.2 1.55
nd
2 Wave 200 1.25 15 1.45
rd
3 Wave 175 1.2 16 1.35
Present Situation 100 1.4 13.8 1.6
Units Rupees Rupees 000’ Rupees

● Intercept of the Regression = -38921.42857

● Estimated Regression Coefficient of the product’s price = -7678.571429
● Estimated Regression Coefficient of the income of customer = 1446.428571
● Estimated Regression Coefficient of the substitute product’s price = 18642.85714
Demand Function for SPAR’s Dettol Soap:

Y = a + b1X1 + b2X2 + b3X3

Qd of ds Current accounts (Qd ds) = a (Intercept) + b1 O.D interest rate of Current Account
(Pds)+ b2 Income of the Customer (I) + b3 Price of Substitute Product Self-employment loans
interest rate (P ls)
Qd ds = a + b1 Pds + b2 I + b3 P ls
● Qd = -38921.42857-7678.571429 P ds + 1446.428571 I +18642.85714P ls

Individual significance using the p values:

Decision rule: if p value is less than 0.05 it is significant.

❖ Intercept = Not significant

❖ O.D interest rate of Current Account= Not significant
❖ Expense of the Customer = Not significant
❖ Self-employment loans interest rate= Not significant
Overall model significance using the p values:

F-statistic related P value = 0.146655 (P value > 0.01)

❖ Therefore, this overall model is significant.

Coefficient of determination.

R Square 0.986673774

99% of the total variation in Qd of O.D interest rate of Current Account is explained by the variation
in the independent variables of this model.

Goodness fit: Coefficient of Determination: Concludes that the overall model is significant.

b1 = When the price of O.D interest rate of Current Account increases by 1 unit, the quantity
demanded of O.D interest rate of Current Account will decrease by 7678.57 units.

b2 = When the income increases by 1 unit, the quantity demanded of O.D interest rate of Current
Accounts will also increase by 1446.42 units.
b3 = When the price of Substitute Product Self-employment loans interest rate increases by 1 unit,
the quantity demanded of O.D interest rate of Current Accounts will also increase by 18642.85 units.
How has COVID 19 impacted the demand forecasting of the firm as well as
the selected product?
According to the data given by the supermarkets, following is the impact on covid 19 on the demand
forecasting of the particular supermarkets and their products under Trend Projection and Moving Average
Forecasts.

1. Trend Projection

Time Period Demand For

current
Quarter T accounts
2019 1 1 135
2 2 125
3 3 115
4 4 100
2020 1 5 100
2 6 95
3 7 92
4 8 88
2021 1 9 95
2 10 91
3 11 89
4 12 135.0908

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.877208
R Square 0.769494
Adjusted R
Square 0.743882
Standard
Error 7.966851
Observation
s 11

ANOVA
Significanc
  df SS MS F eF
1906.94 30.044
Regression 1 1906.945 5 5 0.00039
63.4707
Residual 9 571.2364 1
Total 10 2478.182      

Coefficient Standard P- Upper Lower Upper

  s Error t Stat value Lower 95% 95% 95.0% 95.0%
1.4E- 138.90 115.600
Intercept 127.2545 5.151922 24.7004 09 115.6001 9 1 138.909
-
0.0003 2.4452 -
T -4.16364 0.759609 -5.48129 9 -5.88199 8 -5.88199 2.44528

2. Moving Average Forecasts

Demand For
current
Time Period Time accounts 3Q
2019.1 1 135  
2019.2 2 125  
2019.3 3 115  
2019.4 4 100 125
2020.1 5 100 113.3333333
2020.2 6 95 105
2020.3 7 92 98.33333333
2020.4 8 88 95.66666667
2021.1 9 95 91.66666667
2021.2 10 91 91.66666667
2021.3 11 89 91.33333333
2021.4 12 135.0908 91.66666667