Exhibit 16-7

question 68

Short Answer

Exhibit 16-7.It is believed that the sales volume of one liter Pepsi bottles depends on the price of the bottle and the price of one liter bottle of Coca Cola.The following data has been collected for a certain sales region. Using Excel's regression,the linear model PepsiSales = β₀ + β₁PepsiPrice + β₂ColaPrice + ε and the log-log model ln(PepsiSales)= β₀ + β₁ln(PepsiPrice)+ β₂ln(ColaPrice)+ ε have been estimated as follows: Refer to Exhibit 16.7.What is the percentage of variations in the sales of Pepsi explained by the estimated linear model?

---

Definitions:

Liabilities

Financial obligations or debts that a company owes to others, which need to be settled over time.

Assets

Economic resources owned or controlled by an entity, expected to produce value or benefit in the future.

Cycle Inventory

Inventory that is carried as a result of the production or purchase process, determined by the frequency of orders and the quantity of goods ordered each time.

Demand Variability

The extent to which demand can fluctuate over a period of time, impacting inventory management and planning processes.