Time has Positive Impact on Sales, but the p-value is Higher Than 0.05 i.e. 0.96 which is not a Strong Value: Operation Management Assignment, OP, New Zealand

1. Time has positive impact on sales, but the p-value is higher than 0.05 i.e. 0.96 which is not a strong value for slope coefficients. Thus, time is not statistically significant.

2. TV, having strong coefficient with a p-value of 9.36^-59, is statistically significant. It has overwhelming results with second lowest expenditure as predicted from model.

3. Radio has strong statically significant slope coefficient with p-value of 3.68^-35, which is less than 0.05. Radio also has positive impact on the overall sales.

The newspaper has a negative impact on the sales as having the coefficient value as -0.0025. Also, it has p-value of 0.72 which is higher than 0.05 making it not statically significant

c.(i). Implications

1. Time has positive impact on sales but it is very minimal i.e. 0.0001%.Also, the p-value is higher than 0.05 i.e. 0.96 which is not a strong value for slope coefficients. So, this is not significant in predicting the sales decision making over time coefficient.
2. It is estimated that spending extra $1000 on TV will have an increase in sales by 0.04% i.e. $400. The amount of sales increment in respect to the additional investment is less than the extra input amount. This would not be advisable looking the amount of the return.
3. A $1000 spent on radio will yield a return of 0.18% i.e. $1800. The return seems viable and it seems viable to invest in radio to increase the sales.
4. Newspaper has a negative impact on the sales and there will be reduction in sales figures in case there is money invested in this variant. For every thousand dollar investment increase the sale will be reduce by $25. It is not at all advisable to input extra funds in this variant.

c.(ii).There is a big limitation on prediction for sales future strategy based on time series data. One of the primary reason is that the time is not statistically significant due to it higher p-value. We will not be able to use time coefficient to predict the future sales strategy. Also, there is no direct investment opportunities for time whereas investment can be increase in other business streams.

Answer (Problem 2)

Furnishing house is an integral part of the housing community which adds extra trend and tradition to the place we call it our “Home”. Indo-Kiwi Home Décor will be a furnishing house exhibiting unique and affordable textile and handloom products like bedsheets, carpets, curtains, blankets, towels and other household inventories.

Indo-Kiwi Home Décor will be a new business targeting families having a rich and eccentric taste in the home decorations. Consumers today tend to place considerable importance on the home as a place to live, relax, and enjoy life with their families – a reflection of the current lifestyle trend toward casual expression in fashionable home furnishings as well as in apparel(Lee & Seock, 2013).

Moreover, the shift in the pattern of buying houses by the millennials due to the changes (like starting a family or getting a job) happening in their lives have a positive impact on the home improvement business (Lloyd, 2018).

Location Strategy
The importance of location comes from the requirement for businesses to be close to market demand(Goldstein, Ward, Leong, & Butler, 2002). There are various factors which determines when finalizing the business location in order to yield the maximum returns.
The two optimum locations for Indo-Kiwi Home Décor are Tauranga and Christchurch. Both the cities are unique & beautiful in their own way. Below are some of the factors which we will focus on to finalizing the location.

1.Cost and availability of labour

The business requirement is good sales skills along with great customer service as the knowledge of the products will be imparted on-job. There is enough labour force in both the cities as per the statistical data for 2018 as there is almost 50% working population. The minimum wage rate is same for both the cities i.e. $18.90(Employment New Zealand, 2020)and will have no specific impact.

2.Customer Density and Demographics

Tauranga is one of the fastest growing city and has a top preference for settling post retirement. Whereas Christchurch is one of the new cities upbringing post severe natural disaster having technological growth. In terms of population, Tauranga is less than half of Christchurch (136K vs 369K)(Stats NZ, 2018). Tauranga also serves as the central point for Hamilton and Auckland along with the business, culture, international trade and horticulture science centre which adds more to its customer base. Christchurch (South Island as a whole) is more prone natural disasters as per our previous experiences.

3.Market Demand of Goods and Services

Tauranga has grown immensely as it is the 1^st preference for relocation in New Zealand. The property has grown immensely and have created a huge demand for new houses being built. On the other hand Christchurch is more bent towards the technological advanced hub and as a tourism city. Due to high relocation index, Tauranga consumers would have a varied taste in the home furnishings which will have a positive impact.

4.The attractiveness of the Location

Tauranga has beautiful landscapes with long stretched beach lines and countries largest operational port. The port enables easy access to import material within minima time for the business survival on imports. Tauranga weather is moderate during summers & winters whereas weather in Christchurch is severe cold for most part of the year. Christchurch is well known for their tourism places as it is being promoted widely by Air NZ.

Determining criteria for finalizing location

It is a difficult decision for choosing one location as both have their pros and cons. In order to reach to positive outcome, I would consider the market demand of goods and services as the deciding factor. Any business survives primarily on the market demand.

If there is a constant demand then there are high chances of future growth. As Tauranga is a growing city and a home for new owners, there will be a positive curve in the demand of the furnishing market. This location will enable to reach to nearby other prime cities of Hamilton and Auckland which will in turn add to Tauranga population base.