Answer to Test #9: Negative Sales Growth, Negative Company Volatility

Volatility and Sales GrowthAnswer to Test #9: Negative Sales Growth, Negative 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	1200	Supplier 1	40%	480	Supplier 2	60%	720
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	3400			1940			1460
Suppliers in Market	Amount Sold	% Total Market Share
Supplier 1	1440	42.4%
Supplier 2	1460	42.9%
Supplier 3	500	14.7%
Total	3400	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	-420	-22.6%	-270	64%	-150	36%
Supplier 2	120	9.0%	270	225%	-150	-125%
Supplier 3	0	0%	0	0%	0	0%
Total	-300	-8.1%	0	0%	-300	100%

Explanation: In order for this condition to hold, Supplier 1's customers must allocate less of their purchases to the company, and its original customer group must purchase less than it did in the beginning of the period. We reached our answer by having Customer A purchase only 1200 units and then allocate only 40% of those units to Supplier 1.