a$.$ Calculate the Gross Margin estimates for the first five years for the different price options and demand forecast scenarios $($use Table B in the next page as a guide; the demand forecasts are given to you in Table A below$).$

Table A Metabical Demand Forecasts $(000\text{'}$s$)$ for four week count packages.

Method $1$

Year $1$

Year $2$

Year $3$

Year $4$

Year $5$

Number of Americans with BMI between $25$ and $30$

$78,200,000$

$78,200,000$

$78,200,000$

$78,200,000$

$78,200,000$

x$35\%$ actively trying to lose weight

$27,370,000$

$27,370,000$

$27,370,000$

$27,370,000$

$27,370,000$

x$15\%$ who are comfortable using diet pills

$4,105,500$

$4,105,500$

$4,105,500$

$4,105,500$

$4,105,500$

$10\%$ who might purchase Metabocilin Year $1$

adding $5\%$ each subsequent year

$410,550$

$615,825$

$821,100$

$1,026,375$

$1,231,650$

Unit sales

plus $60\%$ buy a second package

$246,330$

$369,495$

$492,660$

$615,825$

$738,990$

Unit sales

plus $20\%$ of these buy a third package

$49,266$

$73,899$

$98,532$

$123,165$

$147,798$

Unit sales

Sales

$706,146$

$1,059,219$

$1,412,292$

$1,765,365$

$2\mathrm{.}118\mathrm{.}438$

Unit sales

Method $2$

Number of Americans with BMI between $25$ and $30$

$78,200,000$

$78,200,000$

$78,200,000$

$78,200,000$

$78,200,000$

x $12\%$ say they will go to a doctor to request prescription

$9,384,000$

$9,384,000$

$9,384,000$

$9,384,000$

$9,384,000$

$10\%$ who might purchase Metabocil Year $1$

adding $5\%$ each subsequent year

$938,400$

$1,407,600$

$1,876,800$

$2,346,000$

$2,815,200$

plus $60\%$ buy a second package

$563,040$

$844,560$

$1,126,080$

$1,407,600$

$1,689,120$

plus $20\%$ of these buy a third package

$112,608$

$168,912$

$225,216$

$281,520$

$337,824$

Sales

$1,614,048$

$2,421,072$

$3,228,096$

$4,035,120$

$4,842,144$

Method $3$

Ideal target $($overweight femmes, $35-65,$ college$-$educated$)$

$4,300,000$

$4,300,000$

$4,300,000$

$4,300,000$

$4,300,000$

$30\%$ who might purchase Metabocil Year $1$

adding $5\%$ each subsequent year

$1,290,000$

$1,505,000$

$1,720,000$

$1,935,000$

$2,150,000$

plus $60\%$ buy a second package

$774,000$

$903,000$

$1,032,000$

$1,161,0001,290,000$

$1,290,000$

plus $20\%$ of these buy a third package

$154,800$

$180,600$

$206,400$

$232,200$

$258,000$

Sales

$2,218,800$

$2,588,600$

$2,958,400$

$3,328,200$

$3,698,000$Gross Margin Estimates

Gross Margin Forcast

Manufacturer gross margin per unit $*$ forecasted unit sales

$$75$ Retail Price

Year $1($$$)$

Year $2($$$)$

Year $3($$$)$

Year $4($$$)$

Year $5($$$)$

Cumulative

Forecast Method $1$

$17,512,421$

$26,268,631$

$35,024,842$

$43,781,052$

$52,537,262$

$175,124,208$

Forecast Method $2$

$18,474,750$

Forecast Method $3$

$$125$ Retail Price

Year $1($$$)$

Year $2($$$)$

Year $3($$$)$

Year $4($$$)$

Year $5($$$)$

Cumulative

Forecast Method $1$

$41,048,267$

$61,572,400$

$82,096,534$

$102,620,667$

$123,144,801$

$410,482,670$

Forecast Method $2$

Forecast Method $3$

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