Question

As the Apple Inc. management group continues to review efforts to improve the efficiency of the firm’s global supply chain, they are also evaluating the possible addition of another personal electronic device to their product portfolio. The product development group has provided data to estimate the demand for the new device and is recommending a price of $375 as it is introduced into the market.

Part 1
Only a conceptual outline is expected in each question of Part 1.
As the data was gathered it was believed there would be value in analyzing the data in both a linear and log-linear format. Regress both of the data sets and outline the processes you would recommend to evaluate the proposed project. How would you determine whether the proposed price is appropriate? What else would you need to analyze to make a recommendation as to whether the company should proceed, withdraw, or make needed revisions before continuing with the project?
Are there other factors beyond those outlined that you believe would be useful to know prior to making a decision on proceeding with the project?

Part 2
Use the information in the attached Excel spreadsheet to evaluate this part of the exam. This data set is only applicable to this section of the Comprehensive Exam. Show your work, including the results of your regression outputs.
Use the average values of the independent variable parameters to obtain the specific form of the demand equation. Given a marginal cost function of MC = 4250 – 1.68Q + .000087Q2, calculate the optimum price and quantity. Will Apple be able to achieve profitability with the proposed product?
Provide an appropriate narrative of your results, including the likelihood this project will be successful.

Apple Inc.: Managing the Global Supply Chain
	Linear							Log-Linear
#	Q	P	Pop	Income	Adv	Pr		Q	P	Pop	Income	Adv	Pr
1	8325	354	6477	35680	2700	227		9.02706	5.86877	8.77605	10.48235	7.90101	5.42715
2	8160	423	6875	38580	3200	294		9.00696	6.04658	8.83565	10.56049	8.07091	5.68304
3	7205	292	6599	43290	2900	275		8.88254	5.67690	8.79464	10.67568	7.97247	5.61602
4	8325	354	6658	35700	3000	227		9.02706	5.86877	8.80352	10.48291	8.00637	5.42715
5	5496	369	6719	45300	2850	487		8.61185	5.91060	8.81269	10.72106	7.95507	6.18739
6	8503	451	7550	38750	3540	325		9.04815	6.11123	8.92930	10.56489	8.17188	5.78322
7	8325	354	6836	36100	3200	227		9.02706	5.86877	8.82998	10.49405	8.07091	5.42715
8	5942	359	6892	42400	3650	424		8.68973	5.88444	8.83806	10.65490	8.20248	6.04992
9	4910	477	6948	44300	3860	573		8.49901	6.16836	8.84614	10.69874	8.25842	6.35056
10	7651	461	7006	37210	2800	231		8.94265	6.13255	8.85456	10.52433	7.93737	5.44347
11	5330	388	6321	43510	3200	540		8.58109	5.96200	8.75163	10.68075	8.07091	6.29187
12	5139	447	7125	42610	3400	545		8.54458	6.10153	8.87133	10.65984	8.13153	6.30071
13	7665	307	7183	42315	3150	280		8.94444	5.72667	8.87944	10.65290	8.05516	5.63581
14	8519	445	7239	39760	4100	298		9.05007	6.09716	8.88722	10.59062	8.31874	5.69826
15	6356	327	6287	45200	3350	297		8.75720	5.79072	8.74624	10.71885	8.11672	5.69515
16	6768	413	6844	48340	3630	336		8.81999	6.02331	8.83113	10.78601	8.19699	5.81850
17	5055	251	5998	40880	2600	343		8.52815	5.52611	8.69918	10.61840	7.86327	5.83907
18	8398	356	7105	39800	3100	426		9.03574	5.87441	8.86855	10.59162	8.03916	6.05349
19	5667	256	6233	41800	2860	436		8.64249	5.54550	8.73761	10.64065	7.95858	6.07784
20	7729	384	6638	40450	3520	274		8.95271	5.95133	8.80057	10.60782	8.16622	5.61292

Answer 1

Since I have limited time I have not done PART II.Can you post it separately