Example #1: Volatility


Volatility and Sales GrowthExample #1: Volatility

Yellow Highlighting=Change from Beginning of Period



Beginning of Period

Customers in Market

Amt Purch from all Suppliers

Primary Supplier

Primary Supplier % of Cust Purch Units of Sale by Primary Supp

Secondary Supplier

Secondary Supp % of Cust Purch Units of Sale by Secondary Supp
Customer A 1500 Supplier 1 60% 900 Supplier 2 40% 600
Customer B 1200 Supplier 1 80% 960 Supplier 2 20% 240
Customer C 1000 Supplier 2 50% 500 Supplier 3 50% 500
Customer D 0 None 0% 0 None 0% 0
Total 3700 2360 1340
Suppliers in Market Amount
Sold
% Total Market Share
Supplier 1 1860 50.3%
Supplier 2 1340 36.2%
Supplier 3 500 13.5%
Total 3700 100.0%

End of Period

Customers in Market

Amt Purch from all Suppliers

Primary Supplier

Primary Supplier % of Cust Purch Units of Sale by Primary Supp

Secondary Supplier

Secondary Supp % of Cust Purch Units of Sale by Secondary Supp
Customer A 1500 Supplier 1 75% 1125 Supplier 2 25% 375
Customer B 1200 Supplier 1 80% 960 Supplier 2 20% 240
Customer C 1000 Supplier 2 50% 500 Supplier 3 50% 500
Customer D 0 None 0% 0 None 0% 0
Total 3700 2585 1115
Suppliers in Market Amount
Sold
% Total Market Share
Supplier 1 2085 56.4%
Supplier 2 1115 30.1%
Supplier 3 500 13.5%
Total 3700 100.0%


Summary of Changes During Period

Supplier

Change in Unit Sales Volume % Volume Change from Beginning to End Net Unit Volatility in Volume Change Volatility as % of Unit Sales Volume Change

Customer Growth in Volume Change

Customer Growth as % of Unit Sales Volume Change
Supplier 1 225 12.1% 225 100% 0 0%
Supplier 2 -225 -16.8% -225 100% 0 0%
Supplier 3 0 0.0% 0 0% 0 0%
Total 0 0.0% 0 0% 0 0%

Explanation: In this example, Customer A increased the percentage of its purchases from Supplier 1 from 60% to 75% and reduced its purchases from Supplier 2 from 40% to 25%. This is an example of Volatility in the marketplace. A customer changed its percentage allocation of its purchases from one supplier to another. Company 1 and Company 2 were both affected by this Volatility event:

The market as a whole has no net unit Volatility because no customer entered or left the market. The market had Positive Volatility of 225 units and Negative Volatility of 225 units.