Hi Guys, I am looking for infomation or links or anyother reference of help in generating a table that demonstrates clearly the relationship between two aspects commonly used in commerce. High volume low profit vs Low volume High profit. Assuming Costs remain the same regardless of volume sold. It would be handy to eventually develope a table that could have the variables plugged in and provide the approriate graphs etc. Maybe someone has a link to something I can download and assess? It is the ability to manipulate the comparitive ratio to determine profit as volume increases yet net profit per unit sold decreases. Thus determining optimum relationships. Any takers?
Hi Dragon, Thanks for that but this is not quite the full answer. I am aware of normal break even calcultions etc. Iam usng an economc model to actual derive a physics question as well as a math questioon. For example: Whena store offers discounts for multiple purchases of the same item. I.e.bulk purchases how would you calculate the actual perfect sale price based on volumes assuming costs remain static and maintain the same customer / business incentive. I have a sneeky feeling the inverse square function can come into play here. Relating to gravity and the curve gradient of force g ($'s) vs distance (volume) or vica versa. If we consider for example that g = volume and distance from source = money? You could end up drawing 2 circles side by side and measuring the distance on the horizontal from one ot the other......a quick drawing Please Register or Log in to view the hidden image! the pink lines would show d=% of total sale or something like`that The relationship between the constant "circle [cost] [energy]" and distance and force of course if costs [constant was a variable] then you could end up with Please Register or Log in to view the hidden image! So the relationship of cost [energy used ] would change relative to the variation of the other factors of distance and volume. bah!! just rambling.... If you wanted to work out a perfect multi - level (5 levels) marketing commission structure how would you do it? [sort of question]
Up to you Pete, I wasn't sure which to go for with the thread. It actually applies to both Math and economics but if economics serves the math aspect then economics is where it needs to go.
QQ...I don't know where you are going with this, but the area with the pink lines is equal to =0.5*((4r^2)-(pi*r^2)) where r is radius
thanks dragon. this is hard for me to express as I don't know the terminology but I'll give it a go. we have 100,000 silve plated tea-spoons for sale. They fell of a truck and "John " wants to get rid of them real quick and reckons if he can make 30% of the take he would be happy. He knows that the spoons will retail at $5 each and only one will be purchased by the end user customer. Which means he has a total sell of $500,000 of which he only wants $150,000 as profit. [so Johns take = 0.3*(0.5*((4r^2)-(pi*r^2)) ] yes? He has a friend, Pete, who is really good at getting rid of hot property fast and decides to pass the whole consignment of spoons over to him on the proviso that no matter what happens John must get 30% of the $500,000 sales. If Pete can sell them all at retail he stands to make $350,000. But of course he can't do it by himself. He creates a selling organisation. Pete knows that for someone to sell a spoon retail and be really motivated that person must make a commission on the sale of [say] 40%. So bottom seller must make $2 per spoon. so the bottom line sellers' total take is =0.4*(0.5*((4r^2)-(pi*r^2)) Which means that for Petes organisation will only make a total of 30% of $500,0000 which means Petes organisation makes: $150,000 And the bottom line collection of sellers, as a collective stand to make $200,000 (40% of $500,000) So we have John at the top gets $150,000 Petes team gets a total $150,000 Sellers get $200,000 total = $500,000 can be shown as approximately looking like this [ please correct me if I am wrong]: Please Register or Log in to view the hidden image!
The issue is that Pete obviously can't sell the spoons himself as he has 100,000 customers to see. Physically impossible so the question is how does he structure his selling teams commisions so that he recieves a reasonable return for doing so. and what would his personal take be in teh end once he shares the commission he is recieving with those under him. So the limitations of the situation are: John must get his $150,000. Petes division must be $150,000 The end seller must be $200,000 each end customer can only purchase one spoon. The question I have in my mind about this is "what would be the natural outcome? How many total persons are directly involved? end customers = 100,000 Petes selling division = ? +pete Johns division = 1 using the sloped pyramid idea how would you apply a formula to calculate this result? 1 at the top ? in the middle including ? sellers at the bottom. [ obviously sellers would <100,000 ] I have a feeling that for every level in the pyramid a sloped triangle will be needed and the ratio of comission share is a really straightforward formula. In summary: It is Petes job to get as many persons selling the spoons as possible unload the whole shipment as quickly as possible yet retain the maximum commision for himself. So he passes to many who inturn pass to many and so on. Multi level netwrork maketing. Using a "natural formula" assuming that the spoons are in high demand. Once the ratio is worked out a table can be created where by johns share, and the sellers share can be input variables thu sdetermining the mix of commisions along the way down the sloped pyramid. for example say John decides he wants more and goes for $200,000 instead or the sellers get only 35.75% commission instead of the 40%. of both etc etc
