Question

1. You have been hired as food/agricultural price analyst by a firm and given the task of calculating the effect of revenue gains/loss by industry participants due food recall event that occurred year ago, December. For this you have been provided with weekly prices of the food product under consideration for past five years through December 2018 at different levels of the supply chain. Explain the approach you would consider taking to address this problem. Use graphs and equations to explain the procedure as thoroughly as possible.

Answer 1

First, we need to begin with the objective. Our objective in this task is to analyze the effect of food recall events on the revenue of the industry. This means we need to answer questions like

“If the number of recalls are higher, id the revenue for that period lower?”

“What is the relation or dollar impact of each recall?”

In order to do that, we need to first segregate the data. We need to make sure that the data is sorted and is categorized. The data should also be in a numerical format. This will result in easier analysis for us later.

Next arrange data and consider the revenue as the dependent variable. Other factors such as yield, recalls, etc. can be the independent variable. We need to run a multiple linear regression approach on this and then identify the equation. This equation will show the relationship between the recalls and the revenue for the industry.