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Name May 4 2011 Summary Marketing Arithmetic Problem Answer A1 0 42 Contribution unit by dre13240


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       May 4, 2011
                     Marketing Arithmetic

   Problem                             Answer
      A1             $0.42 Contribution/unit
      A2                    Breakeven units (million)
      A3                    Breakeven share
      A4                    Profit ($million)
      A5                    Contribution after marketing ($million)
      B1                    Breakeven units (million)
      B2                    Units required (million)
      B3                    Share required
      C1                    Breakeven units (million)
      C2                    Units required (million)
      C3                    Share required
      C4                    Share required
      D1                  0 Difference in receivables ($million)
      D2                    Increase in inventory ($million)
      E1                    Inventory turn
      E2                    Receivables ($millions)
                  May 4, 2011
                                                                Marketing Arithmetic
                                                               Horatio Alger Exercises

                            Data Input
Problems A1 - A4                                                                                            Problem A2
Retail Price ($)                             1.00                       Problem A1                                    $ 000,000
Retail Margin (%)                           33.00                                    Dollars     Fixed Mfg Cost
Wholesale margin (%)                        12.00              Retail Price               1.00   Prod Manager salary
Market size (units, millions)               20.00              Retail margin              0.33   Yearly Advertising
Market share (%)                            24.00                                                Total fixed cost
Variable Mfg cost/unit ($)                   0.09              Wh'lse price              0.67
Fixed Mfg cost ($ million)                   0.90              Wh'lse margin             0.08    B. E. (million units)        0.00
Advertising budget ($million)                0.50
Shipping, etc. per unit ($)                  0.02              Factory price             0.59              Problem A3
Sales Commission (%)                        10.00              Variable cost             0.09    B. E. Market share
Prod manager salary, exp                     0.04              Factory margin            0.50
Problem B1 - B3                                                Shipping, etc             0.02    Problem A4              $ 000,000
Market size (units, millions)               23.00              Commissions               0.06    Dollar contribution
Advertising budget ($million)                1.00              Contribution              0.42    Less total fixed cost
Problem C1 - C4                                                          Problem B1
Retail Margin (%)                           40.00                                 $ 000,000      Problem A5              $ 000,000
Wholesale margins (%)                       12.00              Fixed Mfg Cost                    Factory revenu
                                                               Prod Manager sal.                 Variable cost
                                                               Yearly Advertising                Contribution
                                                               Total fixed cost                   Advertising
                                                               B. E. (mil units)                  Prod manager sal.
                                                                                                  Shipping, etc
                                          Problem B2                     Problem B3               Commissions
                                                   $ 000,000                      000,000        Contribu after mkt           0.00
                                Fixed Mfg cost                 Fixed Mfg cost
                                Marketing cost                 Marketing cost
                                Profit requirement             Profit requirement
                                 Total                          Total
                                Units required                 Units required
                                Share required                 Share required
                                          Marketing Arithmetic
                                   Horatio Alger Exercises -- continued

                                                    Problem C1
                                                  $/unit                      Millions                                   Problem C2
                           Retail Price                    Factory fixed cost                                                      Millions
                           Retail Margin                     Marketing cost                                   Factory fixed cost
                                                                  Total fixed                                 Marketing cost
                           Wh'lse price                           B.E. units                                  Profit required
                           Wh'lse margin(.12)                                                                  Total requirement
                           Factory price                                                                      Units required
                           Variable cost
                           Factory margin                                                                              Problem C3
                           Shipping, etc                                                                      Share required

                                                                                                        Problem C4
                                                                                         Factory fixed cost
                                                                                         Marketing cost
                                                                                         Profit required
                                                                                          Total requirement
                                                                                         Units required
                                                                                         Share required

See: 123ManagementCases/MarketingArithmetic.xls
May 4, 2011

                 Data Input                                        Marketing Arithmetic
Problems A1 - A4                                            Horatio Alger Exercises -- continued
Retail Price ($)
Retail Margin (%)               Problem D1
Wholesale margin (%)
Market size (units, millions)   Demand (units)
Market share (%)                Sales/day (units)
Variable Mfg cost/unit ($)      Factory price/unit
Fixed Mfg cost ($ million)      Sales/day ($)
Advertising budget ($million)   Receivables
Shipping, etc. per unit ($)     Difference ($)
Sales Commission (%)
Prod manager salary, exp        Problem D2
Problem B1 - B3                 Unit sales/year ($Mil)
Market size (units, millions)   Mfg variable ($ Mil)
Advertising budget ($million)   Sales commis ($Mil)
                                Shipping ($Mil)
Problem C1 - C4                 Fixed manufact ($Mil)
Retail Margin (%)               Cost of goods ($Mil)
Wholesale margins (%)           F. G. inventory ($Mil)
                                Increase in inv ($Mil)
Input D & E
Days in receivables
Finished goods inv. turn/yr     Problem E1                                         Problem E2
Market share (%)                Unit Demand (Mil)                                  Demand (mil units)
                                Unit sales/year ($ Mil)                            Sales/ day (units)
                                Variable mfg cost ($ mil)                          Sales/ day ($)
                                Sales comm ($Mil)                                  Days in receivables
                                Shipping/unit ($Mil)                               Receivables ($)
                                Fixed manufact ($Mil)
                                Cost of Goods ($Mil)
                                Avg. Inventory ($)
                                Inventory turn

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