Professional Documents
Culture Documents
163146
Price -0.08989
Log LL
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-0.209296027
-0.274997499
Intercept 1.878416 4.962583 0.489384 0
Price -0.01249 (0.02) -0.00621
Pick Pick
Choice# XBOX PS WII XBOX Pick PS Pick WII nothing
1 $221 $267 $275 28 11 14 47
2 $193 $295 $275 38 1 14 47
3 $278 $294 $176 10 2 43 45
4 $288 $191 $250 2 44 10 44
5 $162 $224 $221 30 16 17 37
6 $172 $249 $157 23 15 24 38
7 $167 $251 $169 24 12 25 39
8 $213 $255 $158 21 25 9 45
Suppose
$268 $215 $190
Logit X Logit of Logit of Dinomin Prob X Prob
Box Logit of PS Wii Nothing ator box Prob PS Prob Wii Noth
(0.88) (1.55) (1.22) 0 1.92 0.22 0.110125319 0.154035368 0.52
(0.53) (2.24) (1.22) 0 1.99 0.30 0.053692781 0.148727793 0.50
(1.59) (2.21) (0.60) 0 1.86 0.11 0.058875939 0.294212847 0.54
(1.72) 0.30 (1.06) 0 2.88 0.06 0.469952819 0.12015105 0.35
(0.14) (0.50) (0.88) 0 2.88 0.30 0.209598736 0.143536257 0.35
(0.27) (1.11) (0.49) 0 2.71 0.28 0.121269409 0.227394253 0.37
(0.21) (1.16) (0.56) 0 2.70 0.30 0.115948004 0.211905639 0.37
(0.78) (1.26) (0.49) 0 2.35 0.19 0.120534503 0.260035099 0.42
(984.76)
Uni
Delta United United Delta non United United Delta Non_stop
Non stop Nonstop One Stop Nothing Stop Non stop One Stop Logit Logit
25 37 25 12 $500.00 $390.00 $370.00 $0.71 $0.81
29 32 26 12 $480.00 $400.00 $360.00 $0.71 $0.81
32 29 26 14 $490.00 $430.00 $380.00 $0.71 $0.81
29 29 27 16 $510.00 $440.00 $385.00 $0.71 $0.81
27 31 27 16 $520.00 $435.00 $390.00 $0.71 $0.81
So, to solve the above problem, we must put the price and intercept of United 1 stop to zero and rerun the solver.
Then we must run the solver again to maximize the margin; by changing Delta's price. Contrain the quantity sold to l
Uni
Delta United United Delta non United United Delta Non_stop
Non stop Nonstop One Stop Nothing Stop Non stop One Stop Logit Logit
25 37 25 12 $500.00 $390.00 $370.00 $0.35 $0.67
29 32 26 12 $480.00 $400.00 $360.00 $0.48 $0.60
32 29 26 14 $490.00 $430.00 $380.00 $0.41 $0.37
29 29 27 16 $510.00 $440.00 $385.00 $0.28 $0.29
27 31 27 16 $520.00 $435.00 $390.00 $0.21 $0.33
Total Demad
Q for Delta
Revenue
Cost
Margin
Uni one Nothing Dinomina
Stop Logit Logit tor Prob Delta Prob Uni 1 Prob Uni 2 Prob noth LL Delta LL UNi1
$0.63 0 7.16 0.283432854 0.315369902 0.261475919 0.14 -31.5195 -42.6983
$0.63 0 7.16 0.283432854 0.315369902 0.261475919 0.14 -36.5626 -36.9283
$0.63 0 7.16 0.283432854 0.315369902 0.261475919 0.14 -40.345 -33.4663
$0.63 0 7.16 0.283432854 0.315369902 0.261475919 0.14 -36.5626 -33.4663
$0.63 0 7.16 0.283432854 0.315369902 0.261475919 0.14 -34.0411 -35.7743
ce it is close)
500
207.65473 (This should be less than/equal to 300)
$77,297.01
23880.294
$53,416.72
-674.857 674.857 0.000317
LL
Ll Uni2 Nothing Total LL 0.000634
-33.5353 (23.62) -131.37 0.979911
-34.8767 (23.62) -131.985
-34.8767 (27.55) -136.241
-36.2182 (31.49) -137.737
-36.2182 (31.49) -137.523
-682.892
LL
Ll Uni2 Nothing Total LL
-42.0396 (20.18) -132.917
-43.9982 (20.31) -134.527
-41.6207 (22.41) -137.776
-41.5697 (24.63) -138.901
-41.3769 (24.52) -138.771
Intercept 1.140738 2.761391 0
Price -0.26529 -0.4236
Logit Logit
Generic P&G Generic P&G None Generic Logit P&G Nothing
5 8 35 22 43 -0.18572 -0.62743 0
5.5 7 29 29 42 -0.31836 -0.20383 0
7 9 24 18 59 -0.7163 -1.05103 0
7.5 8 17 28 33 -0.84894 -0.62743 0
0.85 10 56 4 28 0.915241 -1.47463 0
4 7 37 26 28 0.079575 -0.20383 0
3.5 6.5 38 28 27 0.21222 0.007974 0
1. P& G is a better brand despite having higher price sensititivity. Logical since cheaper brands have lower
2. Price is significant since the p value of the Chi Sq is almost 0
Goes to show that a great brand is more than made up by higher price se
LL
-667.753 Null Model LL -700.537
Dinomina Prob
tor Prob Gen Prob P&G Noth LL Full Model LL -667.537
2.364472 0.351245 0.225827 0.422927 -106.359
2.542943 0.286023 0.320732 0.393245 -108.476 Dif 33
1.838134 0.26579 0.19018 0.54403 -97.5936 2*dif 66
1.961829 0.218096 0.272176 0.509728 -84.5625 Chi Sq p-value 4.50923E-16
3.72624 0.670214 0.061419 0.268367 -70.4002
2.89843 0.373591 0.281395 0.345014 -99.1946
3.244426 0.38109 0.310689 0.308221 -101.168
Logit for
Scenario H&S H&S Lite CVS HS HS Lite CVS None H&S
1 3.6 3.6 3.6 70 13 4 13 1.517869
2 3.8 2.8 2.6 59 22 7 13 1.395028
3 4 3 2.7 58 21 7 14 1.272186
4 4.2 3 2.7 54 23 8 15 1.149344
5 4.4 3.1 2.6 51 23 9 17 1.026502
6 4.6 2.9 2.5 46 27 10 17 0.90366
7 4.8 3 2.8 44 28 9 19 0.780818
8 5 3 2.9 41 30 9 20 0.657976
9 5.2 3 2.6 37 31 11 21 0.535134
10 5.4 3.1 3 35 32 9 23 0.412293
11 5.6 3.3 2.8 33 30 12 25 0.289451
12 5.8 3.5 3.1 32 29 11 28 0.166609
13 6 3.7 3.2 31 28 11 31 0.043767
14 6.2 4 3.2 29 25 12 34 -0.07907
15 6.4 4.5 3.4 29 20 12 39 -0.20192
16 6.6 4.7 3.6 28 19 11 42 -0.32476
To know if Lite adds value Run put the price and brand of Lite to 0 and run the solver
So, there is a shift to P&G from both CVS, As well as Nothing. And possibly due to H&S lite, H&S
So, the company gains from introduction of lite interms of Market Share.
Suppose now we know the unit costs of H&S = 2.2, and that of Lite is 1.4. Also suppose the pric
5.794696 5.30014 3 0.169867
Total Market
Sales of H&S
Sales of Lite
Revenue of H&S
Revenue of Lite
Total Revenue
Cost of H&S
Cost of Lite
Total Cost
Margin
So, the margin from selling both H&S and Lite is 196.659
-1992.06
Logit For Logit for Logit for Dinomina Prob for Prob For Prob for Prob for
H&S Lite CVS Nothing tor H&S Lite CVS Nothing LL
-0.01564 -0.35989 0 7.244729 0.629767 0.135889 0.096312 0.138031 -93.4195
0.398103 -1.35989 0 6.780773 0.595078 0.219591 0.037856 0.147476 -111.778
0.294667 -1.25989 0 6.195009 0.576051 0.216736 0.045793 0.16142 -111.219
0.294667 -1.25989 0 5.782486 0.545807 0.232197 0.04906 0.172936 -116.721
0.242948 -1.35989 0 5.322977 0.524384 0.239528 0.048223 0.187865 -121.503
0.346385 -1.45989 0 5.114831 0.48264 0.276441 0.04541 0.19551 -126.893
0.294667 -1.15989 0 4.839458 0.451137 0.277444 0.064784 0.206635 -125.513
0.294667 -1.05989 0 4.620054 0.417935 0.29062 0.074998 0.216448 -126.763
0.294667 -1.35989 0 4.307046 0.396485 0.31174 0.059598 0.232178 -132.049
0.242948 -0.95989 0 4.168215 0.362332 0.305887 0.091871 0.239911 -127.756
0.139512 -1.15989 0 3.798928 0.351597 0.302641 0.082529 0.263232 -133.653
0.036076 -0.85989 0 3.641236 0.324421 0.28472 0.116227 0.274632 -132.313
-0.06736 -0.75989 0 3.447316 0.303059 0.271184 0.135676 0.290081 -133.885
-0.22251 -0.75989 0 3.192193 0.289447 0.250769 0.14652 0.313264 -133.046
-0.48111 -0.55989 0 3.006536 0.271795 0.205585 0.190011 0.332609 -132.275
-0.58454 -0.35989 0 2.977818 0.242695 0.187171 0.234318 0.335816 -133.277
n the solver
nd possibly due to H&S lite, H&S sales also goes up due to anchoring efect.
100
39.81382
13.72782
230.709
72.75935
303.4683
87.59041
19.21894
106.8094
196.659
Full Model LL -1992.06
Null Model LL -2046
Dif 53.94
2*dif 107.88
Chi Sq P Value2.855544E-25
Attribute
design Brand PRICE Approved?GuaranteeRank Design
A 1 1.19 No No 13 A
A 2 1.39 No Yes 11 B
A 3 1.59 Yes No 17 C
B 1 1.39 Yes Yes 2
B 2 1.59 No No 14 Brand
B 3 1.19 No No 3 1
C 1 1.59 No Yes 12 2
C 2 1.19 Yes No 7 3
C 3 1.39 No No 9
A 1 1.59 Yes No 18 Price
A 2 1.19 No Yes 8 1.19
A 3 1.39 No No 15 1.39
B 1 1.19 No No 4 1.59
B 2 1.39 Yes No 6
B 3 1.59 No Yes 5 Approval
C 1 1.39 No No 10 Approved
C 2 1.59 No No 16 Not Approved
C 3 1.19 Yes Yes 1
Gurantee
With Gurantee
Without Gurantee
Regression Statistics
Multiple R 0.991536
R Square 0.983144
Adjusted R 0.968161
Standard E 0.952579
Observatio 18
ANOVA
df SS MS F Significance F
Regression 8 476.3333 59.54167 65.61735 4.49E-07
Residual 9 8.166667 0.907407
Total 17 484.5
Coefficients
Standard Error t Stat P-value Lower 95%Upper 95%
Lower 95.0% Upper 95.0%
Intercept 4.833333 0.635053 7.610915 3.29E-05 3.396744 6.269923 3.396744 6.2699227914
A? -4.5 0.549972 -8.18224 1.85E-05 -5.74412 -3.25588 -5.74412 -3.2558770345
B? 3.5 0.549972 6.363961 0.000131 2.255877 4.744123 2.255877 4.7441229655
Brand 1? -1.5 0.549972 -2.72741 0.023323 -2.74412 -0.25588 -2.74412 -0.2558770345
Brand 2? -2 0.549972 -3.63655 0.00543 -3.24412 -0.75588 -3.24412 -0.7558770345
1.19? 7.666667 0.549972 13.94011 2.13E-07 6.422544 8.91079 6.422544 8.9107896322
1.39? 4.833333 0.549972 8.788327 1.04E-05 3.58921 6.077456 3.58921 6.0774562988
Approved? 1.5 0.47629 3.149344 0.01175 0.422558 2.577442 0.422558 2.5774420936
Gurantee? 4.5 0.47629 9.448032 5.73E-06 3.422558 5.577442 3.422558 5.5774420936
Code Scores Utility Rank Rank of levels
Inverse Ra Forecast
6 6.5
8 7.666667
2 1.833333
17 17.66667
5 6.333333
16 16
7 7.833333
12 12
10 9.666667
1 0.333333
11 10.5
4 5.166667
15 14.5
13 12.66667
14 12.83333
9 8.166667
3 2.833333
18 18.5
Too
Too Expensiv
Price Cheap Bargain Worth it e
Less
than 5 11 6 0 3
5-10 72 42 14 5
10-15 10 19 12 8
16-20 13 16 14 10
21-25 10 24 24 7
26-30 2 12 16 9
31-35 1 4 2 11
36-40 1 2 10 6
41-45 0 0 6 7
46-50 5 7 21 32
51-55 0 0 0 12
55-60 0 2 3 1
61-65 0 0 0 1
66-70 0 0 0 1
71-75 0 1 5 2
76-80 0 0 0 3
81-85 0 0 0 1
86-90 0 0 1 1
91-95 0 0 0 0
96-100 2 5 1 10
101-105 0 0 1 1
106-110 0 0 0 0
111-115 0 0 0 0
116-120 0 0 1 0
greater
than 120 2 1 5 10