Base Disney Exam

independent variable

variable that is manipulated in order to test its effect

dependent variable

variable that’s measured as a response to changes in the other variable

p-value

value that helps determine if you keep the independent variable. if it’s below 0.05, it is statistically relevant

significance f

variable that tells you if the entire model is statistically significant. must be less than 0.05 to be relevant. If it’s greater than 0.05, the model isn’t significant and there’s no meaningful relationship between the independent variables and y

r2

part of a regression that tells the amount of variation for the sample. The higher this number is, the better the x’s do at predicting the y

market segmentation

the process of separating, identifying, and evaluating the layers of a market to identify a target market. Done through market research

demographics

part of market segmentation that considers people’s groups. Their age, marital status, gender, ethnicity, income, etc

psychographics

part of market segmentation that considers how people think. Their activities, personality/values, and their attitudes

behavioral

part of market segmentation that considers what people do. Their benefits, their usage rates, and their patterns.

geographics

part of segmentation that considers where someone is. If they’re local, national, regional, or international

IRR

financial metric that measures an investment’s profitability percentage by finding the discount rate that makes the NPV 0. Used to compare models, accept a project if __>hurdle rate.

NPV

financial metric that measures the current value of future cash flows taking into account TVM against the initial capital expenditure. you accept a project if this metric is greater than zero

MACRS

modified accelerated cost recovery system. Tax depreciation system used in the United States where fixed assets are assigned to a specific asset class, which has a designated depreciation schedule associated. Does not consider salvage value

contribution margin

=revenue-cogs-operating expenses

pre-tax contribution margin

=contribution margin $-depreciation expense

basis points

unit of measure in finance to describe the change in a percentage value/ROR. Is 0.01%

cannibalization

net effect or incremental impact of a new product/service on the revenues of existing products/services. Not new sales, but the sales stolen from preexisting revenue sources

demand-oriented approaches

pricing approaches that take into account the consumers tastes and preferences (externally focused). Includes skimming, penetration, prestige, bundle, etc.

cost-oriented approaches

pricing approaches that are based on product costs (internally focused). Includes standard markup, cost-plus, and experience curve

profit-oriented approaches

pricing approaches that are based on desired profit targets (internally focused). Includes target profit, target return on sales, and target ROI.

competition-oriented approaches

pricing approaches that are based on competitors actions (externally focused). Including customary, above/below market, and loss leader strategies.

EOQ model

determines the optimal order quantity, where the sum of the annual order cost and the annual inventory holding cost is minimized. Where holding costs and ordering costs are equal

ordering cost

the variable cost associated with placing an order. More orders you place, the higher your cost, one of the main components of the EOQ

holding/carrying cost

cost incurred for holding inventory in storage. The more units you have in inventory, the higher the cost, one of the main components of the EOQ

eoq equation

root of (2*annual demand*ordering cost)/(cost*holding cost)