Variable cost includes the burning cost of videos into master copy and it cost around CHF 0.86 for burning, label printing as well as packing. This cost is variable till a certain quantity up to the order of 5300 which will increase by CHF 0.20 for each additional DVD greater than the order of 5300 so company needs to be well aware of its projections to make a proper estimate of its costing to minimize the risk. As, it is already mentioned that the company is also required to pay a royalty fees of around CHF 1.02 for each DVD sold to its performer which will be the variable cost for the company as it will vary with the units sold.
Fyno has forecasted by analyzing the historical 15 years data and arranged to collect the email ids of those people who attended last year’s show on Saturday and she was able to send the email ids to 150 people and she received the response from only 37 people which were not ready to buy DVDs on Saturday night show except 7 people who agreed to buy DVDs. So, she selected a sample size of around 37 out of which 7 were only ready to buy DVDs so she calculated the probability by dividing the people accepting to buy DVD with total number of people responded so the probability received came as 18.92% only which is the mean probability of people attending the Saturday concert and are ready to purchase the DVDs as well. Whereas, it was necessary to calculate the deviation in the responses as well because the data was selected on sample basis and the results may vary from person to person so standard deviation is around 39.17%.
Statistical Analysis of Data:
Statistical analysis was performed by using descriptive statistics and regression analysis techniques along with the graphical presentation of the data.
|Descriptive Statistics results|
|Saturday Attendance||Probable DVD Audience|
|Standard Error||2,793.11||Standard Error||528.46|
|Standard Deviation||10,817.69||Standard Deviation||2,046.71|
|Sample Variance||117,022,355.24||Sample Variance||4,189,007.12|
|Confidence Level(95.0%)||5,990.64||Confidence Level(95.0%)||1,133.43|
Descriptive statistics shows the mean, median, standard deviation, minimum and maximum value of two series of Saturday attendees and the other series which consists of possible DVD audience. It shows that the average people attending the Saturday’s show consists of people around 24,139 people which has a variation of 10818 people which is quite a low variation. Range of the people attending the show is around more than 37000 which consists of the minimum people attending the show is 6510 whereas, maximum people attending the show in 15 years data are around 43,580 people.
Moreover, descriptive analysis of people might be willing to buy the DVD are on average 4567 people with a deviation in their willingness to buy due to the random sampling method is consisting of around 2047people. Range generated by starting from the minimum number to the number of possible DVD audience is around 1232 to 8245 people. Same range has been used to find out the profitability under each case……………….
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