Answer to Test #12: Negative Sales Growth, Zero Company Volatility


Volatility and Sales GrowthAnswer to Test #12: Negative Sales Growth, Zero Company Volatility

Yellow Highlighting=Change from Beginning of Period


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 60% 900 Supplier 2 40% 600
Customer B 700 Supplier 1 80% 560 Supplier 2 20% 140
Customer C 1000 Supplier 2 50% 500 Supplier 3 50% 500
Customer D 0 None 0% 0 None 0% 0
Total 3200 1960 1240
Suppliers in Market Amount
Sold
% Total Market Share
Supplier 1 1460 45.6%
Supplier 2 1240 38.8%
Supplier 3 500 15.6%
Total 3200 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 -400 21.5% 0 0% -400 100%
Supplier 2 -100 -7.5% 0 0% -100 100%
Supplier 3 0 0.0% 0 0% 0 0%
Total -500 -13.5% 0 0% -500 100%

Explanation: In order for this condition to hold, Supplier 1's existing customers must purchase less, but the customers would allocate the same percentage to the Supplier. We reached our answer by having Customer B purchase only 700 units.