Saturday sunday attendance 51824 buyers 8 initial

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Saturday & Sunday attendance = 51,824% buyers = 8%Initial Press = 400027
Charles River JazzProfit Analysis: Scenario Analysis (4k discs)Disks Made4,000 Attendance51,824 Disks Sold4,000 Purchase %8.0%Sales Revenue$ 72,000 Max Sales4,146 Fixed Costs$ 15,000 Var. Prod. Cost / Unit$ 4.50 Variable Costs$ 18,000 Royalty / Unit$ 3.00 Royalties$ 12,000 Price / Unit$ 18.00 Tot Costs$ 45,000 Profits$ 27,000 28
Charles River JazzProfit Analysis: Scenario Analysis (6k discs)29Disks Made6,000 Attendance51,824 Disks Sold4,146 Purchase %8.0%Max Sales4,146 Sales Revenue$ 74,627 Fixed Costs$ 15,000 Var. Prod. Cost / Unit$ 4.50 Variable Costs$ 27,000 Royalty / Unit$ 3.00 Royalties$ 12,438 Price / Unit$ 18.00 Total Costs$ 54,438 [email protected] $ 20,189 [email protected] $27,000
Charles River JazzSell CD’s of Friday PerformancesThe ASYNC “givens were ‘static”:Saturday & Sunday attendance = 51,824% buyers = 8%Initial Press = 4000Simulation analysis would have helped us to explore key dimensions:Saturday and Sunday attendance forecastPercentage of buyersProfitability by running hundreds of permutations30
SIMULATION RESULTS
SIMULATION RESULTSProduceMean ProfitS.D. ProfitCoefficient of Variation2,000$5,970 $330 5.5%3,000$14,790 $3,840 26.0%4,000$19,840 $9,570 48.2%5,000$21,430 $15,230 71.1%6,000$19,840 $17,810 89.8%CV (relative variation) = SD/Mean
Kenan Stadium – InventoryWhat are Adrian’s inventory considerations? What inventory model is he using? Why does Adrian build a cushion into the quantity of hot dogs he orders? What impacts the size of the cushion?Why do inventory policies for bottled water differ from those for hot dogs?33
Callaway GolfProduct dynamicsPremiumSeasonalTight sales windows, usually spring and summerNext product ‘edition’ makes current product obsolete34How to manage inventory?
Callaway Golf35Inventory Drivers- Merchandising inventory (retail outlets and on-line)- Pricing vs buying segmentsPriceMonthsPrice Point 2:On sale: Target: General golf communityPrice Point 1:Full PriceTarget: Latest and greatest buyersPrice Point 3:Clearance: Target: Lagging buyers
Callaway’s Hope36PriceMonthsPrice Point 2:On sale: Target: General golf communityPrice Point 1:Full PriceTarget: Latest and greatest buyersPrice Point 3:Clearance: Target: Lagging buyersMaximize Sales to this segmentATTRACT AND PULL
Key Learning:Even if you can’t eliminate uncertainty (aka risk), you can assess its effect on the decisions you need to make-Fixed Costs-Sunk Costs (gone)-Variable Costs37

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