Answer to Test #14: Negative Sales Growth, Positive Company Volatility

Volatility and Sales GrowthAnswer to Test #14: Negative Sales Growth, Positive 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	100%	1500	Supplier 2	0%	0
Customer B	700	Supplier 1	100%	700	Supplier 2	0%	0
Customer C	1000	Supplier 2	50%	500	Supplier 3	50%	500
Customer D	0	None	0%	0	None	0%	0
Total	3200			2700			500
Suppliers in Market	Amount Sold	% Total Market Share
Supplier 1	2200	68.8%
Supplier 2	500	15.6%
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	340	18.3%	790	232%	-450	-132%
Supplier 2	-840	-62.7%	-790	94%	-50	6%
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, the customers of Supplier 1 must buy less, but at least one customer must allocate a higher percentage of its purchases to the company. We reached our answer by having Customer B purchase only 700 units and having Customers A and B allocate all of their purchases to Supplier 1.