Background
Pizza One is one of over two dozen pizza parlors in the metropolitan area of Dayville, a mid-sized city in the U.S. Midwest. Pizza One prides itself on being the highest quality pizza in the local market and advertises its fresh ingredients and brick oven cooking process. Fifty percent of Pizza One’s business comes from students at the local university. The restaurant is within one mile from campus, approximately four miles from the city center, and within 10 miles of 70% of the population of metropolitan Dayville. It competes to some extent with all of the restaurants in Dayville, however, its biggest competitors are Papa’s Pizza and Cousin’s Pizza. Papa’s also makes a high quality pizza and competes with Pizza One for higher income locals in Dayville. Cousin’s is a much lower quality pizza and attracts much of the college crowd.

Management Directives
The Board of Pizza One wants to evaluate the pricing strategy for one-topping large pizzas and they think varying the price on a regular basis is an unnecessary hassle. The Board only wants to vary the price for one-topping pizzas based on whether or not the university is in session and whether or not a high-profile sporting event is occurring in a given week. You are given the attached data and variable definitions, along with the knowledge that the firm has $4,000 in weekly fixed costs. You are then asked to determine the price of one-topping large pizzas that will maximize profit under these four combined scenarios. This will require estimating demand and cost functions and making some assumptions. The following issues/questions should be addressed within your executive report and presentation.

What are your recommended prices for one-topping large pizzas (when the university is in and out of session and in weeks with and without high-profile sporting events) and what do you expect Pizza One’s weekly profit to be in these four scenarios?
If these prices are consistent with historical prices, explain why the board should accept your recommendation of only minor change.
If these prices are not consistent with historical prices, explain why the board should accept your recommendation of radical change.
Explain the process you went through to determine your demand function
Provide rationale for each of the variables included in the demand function
Explain whether the coefficient estimates are statistically significant and whether the sign on the coefficient estimates are what you expected.
Provide rationale for all of the assumptions that were made to determine the appropriate monthly rates
Explain what changes could occur over the next year that would alter your recommended prices.
Do you agree with the board’s decision to only focus on the price for one-topping large pizzas and to only let this rate vary when the university is in and out of session and in weeks with and without high-profile sporting events? Explain your rationale and provide suggestions if you disagree.

Background Pizza One is one of over two dozen pizza parlors in the...