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October 1st, 2009, 06:21 AM   #1
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Easy business equation

I'm in a math retarded industry who has advanced programmers, none of which are asking the right question.

Please help. I am an assistant who needs an easy equation written that I can figure out how to plug into an excel spreadsheet. Feel free to help with that too :O)

Question: I have X amount of widgets, that I sell for an average rate of $50, then I sell x amount of widgets at a lower rate of $45. How do I find the decrease in percentage of average widget rate, by having sold that second discounted set of widgets? Any help would save lots of people, many more years of heartache.

Thanks!
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October 2nd, 2009, 07:38 PM   #2
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Re: Easy business equation

Quote:
Originally Posted by franktunes
...Question: I have X amount of widgets, that I sell for an average rate of $50, then I sell x amount of widgets at a lower rate of $45. How do I find the decrease in percentage of average widget rate, by having sold that second discounted set of widgets? ...
well, % change uses orig as its datum. So, if 50 orig goes to 40, the decrease is (50-40)/50=20%. I presume it's as simple as you say purely caring about the selling price and not net profit etc. Sounds like the one piece of info missing is what WOULD sales have been without offering any at the discount. You can do variants using assumed volumes, so

Offer only higher price - sell X+? at $50 vs X*$50+x*$45. Note that (X+x) does not necessarily = ?, and we can't even presume X>x
Using made up values as if all was known, if (?,X,x=(20,80,30),
then (X+20)*$50 vs 80*$50+30*$45 yields datum=100*$50=$5000 vs $5350. In this case, there is an INCREASE of (5350-5000)/5000=7% in $$ received

Now the final average selling price cannot be >$50, so you are correct that a decrease is seen. From the example, the average price went to (80*50+30*45)/110=$48.64 for a decrease in unit sell cost of (50-48.64)/50 = 2.72%

Make sense? Myself, I'd care about largest net profit all other factors aside
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