#### To what extent will does correlation and extrapolation assist Nintendo in forecasting sales?

To what extent will does correlation and extrapolation assist Nintendo in forecasting sales? (34 marks) Correlation is the relationship between two variables. Extrapolation is related to correlation, as it involves plotting a linear regression curve (also known as a line of best fit) which is based upon how two variables are correlated, and extending the line to predict future values. For Nintendo, a computer game and console manufacturing company, a common example would be the relationship between the level of advertising expenditure and the effect of this on sales of its products. The graph to the left shows a strong positive correlation between sales and advertising, meaning if Nintendo increases its advertising, they can expect to see an increase in sales. Because all values are close to the line, as advertising expenditure increases on the x-axis, sales on the y-axis increase proportionately. The regression line can be extended past the '80' figure (meaning £80million) to predict what sales will be like if they spend £100million or even £900million. The uses of such analysis to Nintendo are to an extent very valuable. By creating a scatter graph like the one above, Nintendo can spot trends and forecast future events. For example, they could estimate demand at a certain point in the coming year. One would expect demand to surge at Christmas time when people are

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#### Explain how economists model how an increase in government expenditure can lead to a greater increase in national income.

Explain how economists model how an increase in government expenditure can lead to a greater increase in national income. Ans. National income is the total amount of wealth that accrues to the permanent residents of a country as a result of the production of goods and services within a country during the course of a year. It is important to measure national income because it shows whether the standard of living in a country is rising or falling and it can be used as a means of comparison between other countries. It is also useful to measure income against past income in the same country to see whether the economy is growing or declining. An increase in government expenditure is an injection in the circular flow on income. An injection is an addition to the circular flow of income. The diagram above illustrates some of the injections and leakages in the economy. It is however very important to find out exactly what will be the effect on the economy from an increase in injections. Economists do this by calculating the multiplier effect of the increase in the government expenditure on the economy. The multiplier indicates how many times that the injection of original spending circulates through a local economy. As a result of re-spending, it benefits the local people. The formula for calculating the multiplier effect is 1/(1-MPC). When there is an increase in the

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#### Suggest and justify any changes that each of your businesses could make to enable them to meet their aims and objectives more effectively

Suggest and justify any changes that each of your businesses could make to enable them to meet their aims and objectives more effectively Manchester Airport Manchester airport is the 3rd largest airport in the UK. They are always looking for new ways in which they can achieve this. One of their main objectives is to reduce costs to airlines. They could achieve this by incorporating new leisure facilities into the airport, e.g. cinema and bowling alley. This could help them achieve the objective as they would be making profit from the new facilities and so could lower the rent prices to the airlines, this could also help because more airlines would want to set up in Manchester airport due to lower renting cost, so the airport will have more customers, however the airport would have to spend money on building/creating space to build the new facilities. This would mean that the airport would loose money until the facilities have been built and are running and are making sufficient profits. As this would mean money loss, the airport could find another way of making money as it is being built. They could charge retailer more, this would mean taking a higher percentage of the retailer's profits. This would mean the airport would make more money but the retailers would make a decrease in profits. This could also cause retailers not wanting to set up in Manchester Airport as the

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#### Section 2-Marketing

Section 2 - Marketing To make a successful business we needed to complete a number of marketing tasks to research into price, place and promotion. The marketing director was Charlie, who with help from the team researched thoroughly into each of these three subjects. At first the group's idea for a business was to make magnets and sell them in school. Many other ideas were considered, including a football tournament, fair games in the hall and other plans. We were aiming at the target market of lower school, as we were going to sell the magnets on the premises. We thought that the younger students would prefer the product than the older ones, and so needed to plan the product to attract their attention. Also, our market research showed there was more females than males interested, shown in the chart. We decided upon this idea for a number of reasons, including that we could not get permission to use the hall for other events. Furthermore, magnets would be a lot cheaper to make - consequently we could hopefully make more money. We conducted a small amount of primary and secondary research, but probably should have completed more, although the research we used was relatively useful to help us target the product. Primary research is research conducted by the company itself, whereas secondary research is taken from another source that has completed it. The primary research we

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#### Advertising in newspapers and magazines

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#### Birmingham International Airport - Competitors

Like any other airport, Birmingham International has enough competitors that want their own share of its market. The theory is the bigger the better, and better = more profit. This means that BIA will keep having to continually renew their prices so that they stay ahead of the market, and cause their opposition to loose out. I will now discover how BIA keeps ahead of their game, consistently from year to year. One way that BIA keeps ahead is making sure that the facilities that they offer are up to scratch at all times, and they constantly update them to meet demand, and maintain them if necessary (such as toilets etc). BIA have also displayed instances where they care for the customer, one by investing in the EuroHub tunnel, and the other by adding an 'Air-Rail' link to the airport, one of this have decreased the flight transfer times dramatically, and the other has made the travelling times lower than they were before. By creating and maintaining these type of facilities, they do not award their competitors the opportunity to beat them at their own game, and therefore will always stay on top, which has been proven in my other parts of work (how big they are). Referencing to the 'Master Plan' again, they are going to develop the airport fore dramatically which shows again they are always growing bigger, and reducing the opportunity for any other airports to get in edgeways.

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#### Sainsbury's organizational structure.

Task 3 (E4, C2, A1) Sainsbury's organizational structure Businesses are structured into different into ways according to the way they operate and according to their culture. The structure of business can affect the way it works and performs. You need to understand the differences between the following types of structure: * Tall * Flat * Matrix * Hierarchical Flat and tall structure:- The term 'scalar chain is a rather old fashioned one and stems from the days when large organizations were bureaucratic, with lots of layers between the top and bottom. Scalar chain refers to the number of levels within the structure or hierarchy of an organization. The scalar chain set out the authority, responsibility and the framework that determined superior and subordinate relationships. The idea of setting out everyone's role and position is to make it clear who is responsible for what, and that there is clear line of authority. Matrix structure:- A matrix structure can be used to combine the grouping method we have identified. In such a matrix it is probable that each member of the organization will belong to two or more groups. A matrix is thus a combination of structures, which enables employees to contribute to a mix of activities. The matrix enables the organization to focus upon a number of aims at the same time, and gives it the flexibility to respond to new markets where

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#### Concept of Supply

Describe factors affecting Supply and with the aid of diagrams, give scenarios of each case. There are many factors affecting supply and they must all be isolated and analyzed individually and under the ceteris paribus assumption; that is; all other factors remain constant. The determinants of supply can lead to contractions or expansions if supply depends on the price of the good itself, or increases and decreases if any other factor than supply. The market price of the good/service will influence the producer's ability and willingness to supply it. If the price of that good is too low, producers would not be able to cover costs of production and thus would not supply item. Generally, according to the law of supply, as price rises, quantity supplied rises and as price falls, quantity supplied falls. These contractions and expansions in supply are characterized by movements along the supply curve. The Price of other goods/service is another determinant of supply. The quantity of a good or service supplied at any time will be affected by prices of other goods and services. For example, if the price of a motorbike remained the same, while the price of scooter increased, it would become more profitable to produce scooters. Hence firms will be willing to supply fewer motorbikes and start producing and supplying more scooters. Future expectations will also influence the

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#### The Advantages and Disadvantages of a Command Economy or Free Market Economy

The Advantages and Disadvantages of a Command Economy or Free Market Economy There are many aspects and views how the government should control the economy and how much involvement they should have in the economy. In the UK we have a mixed economy which is when the government take control on various factors of the economy such as education, the National Health Service, and many others. Countries such as Cuba, North Korea, and China have command economies which are economies based on the government controlling the activities of the economy and allocating resources. For China this has proved to be a very successful method as China has one of the fastest growing economies in the world at present. The main advantages of a command economy is that services and goods provided are for the benefit of community and not to make profit and also these services or goods are accessible to anyone. Consumers benefit largely from a command economy as they have fixed prices and as it is all government run, it is operated securely, which is very reassuring to the public as they know they will not be deceived when buying good or services. Another advantage is having a low unemployment rate as the government can provide jobs which will increase GDP along with taxation revenue. However, there are also disadvantages to this type of economy, the major one is that there will be no competition as

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