2.

Demand Estimation
1. SPAR : Dettol Soap

● Intercept of the Regression = -5480.4719

● Estimated Regression Coefficient of the product’s price = -7.875933994
● Estimated Regression Coefficient of the income of customer = 379.9705158
● Estimated Regression Coefficient of the substitute product’s price = 45.04648581
Demand Function for SPAR’s Dettol Soap:

Y = a + b1X1 + b2X2 + b3X3

Qd of ds Dettol Soap (Qd ds) = a (Intercept) + b1 Price of Dettol Soap (P ds) + b2 Income of
Customer (I) + b3 Price of Substitute Product: Lux Soap (P ls)
Qd ds = a + b1 Pds + b2 I + b3 P ls
Qd = -5480.4 - 7.8 P ds + 379.9 I +45.0 P ls

Individual significance using the p values:

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

❖ Intercept = Not significant

❖ Price of Dettol Soap = Not significant
❖ Income of Customer = Not significant
❖ Price of Substitute Product: Lux Soap = Not significant
Overall model significance using the p values:

F-statistic related P value = 0.054523077 (P value > 0.05)

❖ Therefore this overall model is significant.

Coefficient of determination.

R Square 0.998165126

99% of the total variation in Qd of Dettol Soap 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 Dettol Soap increases by 1 unit, the quantity demanded of Dettol Soap will
decrease by 7.8 units.

b2 = When the income increases by 1 unit, the quantity demanded of Dettol Soap will also increase by
379.9 units.

b3 = When the price of Lux Soap (Substitute product) increases by 1 unit, the quantity demanded of
Dettol Soap will also increase by 45 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

Spar
2. Moving Average Forecasts

Spar