Question: 4 . SSI would like to determine its potential sales for the first year on the basis of the information in question 3 ( see

4. SSI would like to determine its potential sales for the first year on the basis of the information in question 3(see answer to question 3 below to help solve this question. However, there is some concern that the estimate of average retail sales is too high. SSI assumes only 40 percent of the participating retailers will actually achieve the average sales and reorders (this group is designated as high performers). Twenty percent of the retailers are expected to have medium performance success
and will only sell/reorder 75 percent of the average suggested order. Low-performing retailers represent the remaining 40 percent and will achieve half the sales/reorder expected on average. Calculate the orders (separate initial and reorder quantities) for the 6-month trial period if 45 percent of retailers exclusively order/reorder large packs
and the remaining retailers exclusively order/reorder small packs. Calculate the second 6 months accounting for the dropout. (Round if necessary.) Assume the "performer" ratios remain the same after the trial period (i.e.,40 percent are average performers, 20 percent sell 75 percent of the average, and 40 percent sell 50 percent of the average).
Answer to Question 3, which is required to solve above Question 4:
Calculation of annual sales into number of packs
Large packs contain 180 units while Small packs contain 92 units
Annual Demand is 2912 units. Required number of packers calculated below:
Large Pack 16.1778 packs rounded to nearest whole packet 16 packs
Small Pack 31.6521 packs rounded to nearest whole packet 32 packs
4 . SSI would like to determine its potential

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!