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March 25th, 2014, 11:15 AM   #1
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Sales price calculation

Hey,

For you guys this is probably peanuts:

I have this formula in an IT application I am designing. It is used to calculate sales prices for materials:

(( TMC + ( O * S ) ) * M ) * T ) = S

TMC = Total manufacturing costs = e.g. 720 is given
O = overhead percentage of sales price is given = e.g 25%
S = Sales price we are calculating here
M = Market uplift on total costs = E.g is given factor 3,00 but can be changed, with this we multiply our total costs to add margin
T= Transport upcharge is given: E.g. 1,06

Now to calculate S we can deduct this:

S = T * M * TMC / (1 - ( T * M * O))

Great the solutions I find with this formula are correct BUTTTT

When T * M * O > 1 the solution will be negative, we will not sell something for - so much euro.

What am I doing wrong?

Thank you so much in advance,

MichaŽl
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March 25th, 2014, 05:46 PM   #2
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Re: Sales price calculation

Quote:
Originally Posted by spitzke
(( TMC + ( O * S ) ) * M ) * T ) = S
Where does the missing half bracket "(" go?

Can you provide an ACTUAL example?
Could you use a decimal POINT instead of that funny "," you guys use :P
Like 2.25, not 2,25.
By the way, do you show 1,25 / 100 as ,125? YUK!
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March 25th, 2014, 07:25 PM   #3
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Re: Sales price calculation

,0125 :P
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March 25th, 2014, 08:02 PM   #4
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Re: Sales price calculation

Thanks Greg...10 minutes in the corner for me...
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March 25th, 2014, 08:17 PM   #5
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Re: Sales price calculation

That's o.k. I've been keeping it warm for you.
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March 26th, 2014, 11:20 AM   #6
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Re: Sales price calculation

Quote:
Originally Posted by spitzke
Great the solutions I find with this formula are correct BUTTTT
When T * M * O > 1 the solution will be negative, we will not sell something for - so much euro.
What am I doing wrong?
Looks to me that you're doing everything wrong
Including the solutions you think are correct...

OK; using your illustration (changing TMC to C and O to V):
C = Total manufacturing costs: example 720
V = overhead percentage of sales price: example 25%
M = Market uplift on total costs: example 3%
T = Transport upcharge: example 1.06%
S = Sales price.

Equation should be (assuming M and T are percentages):
S = C + C*(M + T) + S*V
Solving:
S - S*V = C*(1 + M + T)
S(1 - V) = C*(1 + M + T)
S = C*(1 + M + T) / (1 - V)

So program should look like:
C = 720 : V = .25 : M = .03 : T = .0106 ' givens
S = C*(1 + M + T) / (1 - V)
PRINT.....whatever....

This will be the result:
Code:
Manufacturing : 720.00
Uplift        :  21.60
Transport     :   7.63
Overhead      : 249.75
======================
Sale price    : 998.98
...and you'll never get negative results...unless V is over 100%!
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