Week 01

NCCA T-Shirt

Sales Income
Full price $ 18.00 Per shirt
Reduced Price $ 6.00 Per shirt

Costs
Fixed cost $ 750.00
Variable Cost $ 8.00 For a shirt

Number of Shirts orderd 1600

Demand 1500
Number of shirts sold (FP) 1500 =MIN(B15:B16)
Number of shirts sold (RD) 100 =MAX(B15-B16,0)

Total Cost $ 13,550.00

Total Revenue $ 27,600.00
Total Profit 14050 =B22-B21
Woodwork bookshelves Co.

Costs Cherry Oak

Unit Cost $5.50 $4.30
Board Feet 30 30
Material Cost $165.00 $129.00

Labor hours required 16 $16.00

Labor Rate $ 18.50 $18.50
Labor cost $ 296.00 $ 296.00

Total cost $461.00 $425.00

Cost Increases: 2.4% 1.7% 1.5%

Year: Cherry Oak Labor Total Cherry Total Oak

0 $165.00 $129.00 $ 296.00 $461.00 $425.00
1 $168.96 $131.19 $300.44 $469.40 $431.63
2 $173.02 $133.42 $304.95 $477.96 $438.37
3 $177.17 $135.69 $309.52 $486.69 $445.21
4 $181.42 $138.00 $314.16 $495.58 $452.16
5 $185.77 $140.34 $318.88 $504.65 $459.22
=B17*(1+$B$14)

Woodworks Bookshelves Co. Cost Projec-

tions
$520.00
$500.00
$480.00
$460.00
Total cost

$440.00
$420.00
$400.00
$380.00
0 1 2 3 4 5
Years

Total Cherry Total Oak

ec-

5
Week 02

Quality Sweater Company

Costs Quality Sw
Fixed $12
Cost of Catalog printing Fixed $ 20,000.00
variable $10
Printing $ 0.10 per catalog
mailing $ 0.15 per catalog $8

Director reply envelops included $ 0.20 per order only for orders
$6
variable cost per order $ 32.00 per order
Total Cost $ 230,769.23 =B7+(B9+B10)*B18+(B11+B12)*B20
$4

$2

$-
3.0% 3.5% 4.0%
Planned Catalogs 100000
Response Rate 5.77% Dummy value Q1
Total Orders 5769.230769231 =B19*B18

Revenue Breakeven :
Customer order size average $ 40.00
Total Orders 5769.230769231
Total Revenue $ 230,769.23 =B24*B23
total Proft $ - =B25-B13

Response Date Profit

$ -
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
 Quality Sweater Co. - Response rate Vs Profits
$12

$10

$8

$6

$4

$2

$-
3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0%

5.77%
 Quality Sweater Company
In this lesson, we will explore changes in a business's profits by using what-if analysis tools in Excel including data tables and Goal
Seek . Read the problem below carefully. If you’d like, take notes and start setting up a spreadsheet model of your own. Then, watch the
next video in the course to see a solution.

Scenario

The Quality Sweater Company sells hand-knitted sweaters. The company is planning to print a catalog of its products and undertake a
direct mail campaign. The cost of printing the catalog is $20,000 plus $.10 per catalog. The cost of mailing each catalog (including
postage, order forms, and buying names from a mail-order database) is $0.15. In addition, the company plans to include direct reply
envelopes in its mailing and incurs a $.20 in extra costs for each direct mail envelope used by a respondent. The average size of a
customer order is $40, and the company’s variable cost per order (primarily due to labor and material costs) averages about 80% of the
order’s value – that is $32. The company plans to mail 100,000 catalogs. It wants to develop a spreadsheet model to answer the
following questions:

1. How does a change in the response rate affect profit?

2. For what response rate does the company break even?
3. If the company estimates a response rate of 3%, should it proceed with the mailing?
4. How does the presence of uncertainty affect the usefulness of the model?

The Quality Sweater Company sells hand-knitted sweaters. The company is planning to print a catalog of its products and undertake a
direct mail campaign. The cost of printing the catalog is $20,000 plus $.10 per catalog. The cost of mailing each catalog (including
postage, order forms, and buying names from a mail-order database) is $0.15. In addition, the company plans to include direct reply
envelopes in its mailing and incurs a $.20 in extra costs for each direct mail envelope used by a respondent. The average size of a
customer order is $40, and the company’s variable cost per order (primarily due to labor and material costs) averages about 80% of the
order’s value – that is $32. The company plans to mail 100,000 catalogs. It wants to develop a spreadsheet model to answer the
following questions:
Haute Dog
Changes in daily sales
Sales
Daily Open 6 days per week Dailyb sales Weekly Profit
Daily Sales 50 hotdogs per day $ 550.00
10
Costs 20
Startup cost $ 500.00 Fixed 30
Variable cost $ 0.50 Per hotdog 40
Total weekly cost: $ 650.00 50
60
70
Revenue 80
Selling price 4 90
Total weekly revenue : $ 1,200.00 100
110
Weekly Profit: $ 550.00 120
130
140
150

Number of
hotdogs want to
sell for the
breakeven point 24
Total Cost
Moved costs $ 200.00
Weekly cost when
moving for the new
location $ 850.00

Total Revenuw $ 1,200.00

$ 350.00
Using Data- What if analysis Select data tables

Dailyb sales Weekly Profit Keep balank the row input cell
$ 550.00
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
nk the row input cell
B&N Bookstore

Revenue Ordered
Selling price Regular $ 30.00 0
Sale price $ 10.00 1000
2000
3000
Demand for the novel 4500 500-4500 4000
No of novel purchases 2000

Surplus or leftovers: -2500 =B10-B9

Leftovers

Surplus without any

negative number 0 =MAX(B10-B9,0)

Way 2 0 =IF(B9>B10,0,B10-B9)
if demand is bigger than the order, of it is true 0 or if it is false show the deficit

Costs $ 44,500.00 =VLOOKUP(B10,E5:F9,2,TRUE())*B10

Revenue $ 60,000.00 =MIN(B9:B10)*B5 $ 60,000.00 =MIN(B9:B10)*B5+B16*B6

What the store is able to sell

Profit $ 15,500.00 $ 15,500.00

 Profit
Unit cost
$ 24.00 $ 15,500.00 500
$ 23.00 500
$ 22.25 1000
$ 21.75 1500
$ 21.30 2000

Ordered
2500
3000
3500
4000
4500
5000

4500

MIN(B9:B10)*B5+B16*B6 If the Demand is lower than the ordered

 Used two way data tables and input the varaibles

Demand
1000 1500 2000 2500 3000 3500 4000 4500 5000
Copy Shop

Costs
Variable Rent 5000 for year
Other fixed 400 Per month Number of machines 5
Variable cost 0.03 Per copier

Sale price 0.1 Per copier one copier can make 100000 copies per year
Days of selling 365 Days

Demand 76.712328767 500-2000 Perday

Annual demand 140000 =B14*B11*H6

copies made per year 100000

100000 -1.46E-11
100000 1
Daily Demand 100 2
3
Costs 4
5
Fixed Costs 400 per month
Variable Costs
Copier rental 5000
Operation costs 0.03 Per copier

Total cost per year 14000

Total Revenue 14000

Total Profit -1.455192E-11

copies per year

500 1000 1500 2000

o