Example #4: Market Volatility

Volatility and Sales GrowthExample #4: Market Volatility

Yellow Highlighting=Change from Beginning of Period

Beginning of Period
Customers in Market	Amt Purch from all Suppliers	Primary Supplier	Primary Supplier % of Cust Purch	Units of Sale by Primary Supp	Secondary Supplier	Secondary Supp % of Cust Purch	Units of Sale by Secondary Supp
Customer A	1500	Supplier 1	60%	900	Supplier 2	40%	600
Customer B	1200	Supplier 1	80%	960	Supplier 2	20%	240
Customer C	1000	Supplier 2	50%	500	Supplier 3	50%	500
Customer D	0	None	0%	0	None	0%	0
Total	3700			2360			1340
Suppliers in Market	Amount Sold	% Total Market Share
Supplier 1	1860	50.3%
Supplier 2	1340	36.2%
Supplier 3	500	13.5%
Total	3700	100.0%
End of Period
Customers in Market	Amt Purch from all Suppliers	Primary Supplier	Primary Supplier % of Cust Purch	Units of Sale by Primary Supp	Secondary Supplier	Secondary Supp % of Cust Purch	Units of Sale by Secondary Supp
Customer A	1500	Supplier 1	50%	750	Supplier 2	50%	750
Customer B	1200	Supplier 1	80%	960	Supplier 2	20%	240
Customer C	0	None	0%	0	None	0%	0
Customer D	750	Supplier 3	100%	750	None	0%	0
Total	3450			2460			990
Suppliers in Market	Amount Sold	% Total Market Share
Supplier 1	1710	49.6%
Supplier 2	990	28.7%
Supplier 3	750	21.7%
Total	3450	100.0%
*Summary of Changes During Period*
Supplier	Change in Unit Sales Volume	% Volume Change from Beginning to End	Net Unit Volatility in Volume Change	Volatility as % of Unit Sales Volume Change	Customer Growth in Volume Change	Customer Growth as % of Unit Sales Volume Change
Supplier 1	-150	-8.1%	-150	100%	0	0%
Supplier 2	-350	-26.1%	-350	100%	0	0%
Supplier 3	250	50.0%	250	100%	0	0%
Total	-250	-6.8%	-250	100%	0	0%

Explanation: The changes in this example occurred with Customers A,C and D. Customer A reduced its purchase allocation to the Primary Supplier 1 and increased its purchase allocation to Supplier 2. This produced a Positive Volatility event for the market, as well as Supplier 2 of 150 units. This Positive Volatility event for the market was matched by the Negative Volatility event of 150 units in Supplier 1. Customer C left the market, and its 1000 units in sales left with it. Customer D, however, entered the market and purchased 750 units. The loss of Customer C was a Negative Volatility event for the market. The entrance of Customer D with its 750 units was a Positive Volatility event for the market. The market's total Positive Volatility was 900 units. Its total Negative Volatility was 1150 units.