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.