Example #1: Volatility
Volatility and Sales GrowthExample #1: Volatility
Yellow Highlighting=Change from Beginning of Period
Beginning of Period |
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Customers in Market |
Amt Purch from all Suppliers | Primary Supplier % of Cust Purch | Units of Sale by Primary Supp | 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 |
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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% | |||||
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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:
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Company 1 experienced Positive Volatility because it gained sales volume in the Volatility event.
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Customer 2 experienced Negative Volatility because it lost sales volume in the 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.