Product Launch Analytics – Case 1/2

OBJECTIVE Estimate the optimal number of Sales Reps to be hired to promote BAC’s new product.

APPROACH Maximize (Sales – Rep Cost); where additional benefit equals additional cost of hiring

$4,500
MR = MC; Calculation Strategy
$4,000 MR Before this point additional
$3,500
sales from hiring a Rep is 1 As the product is in launch stage, Profit after Rep Cost (Sales – Rep Cost), should be
$3,000
greater than additional cost. maximized
Beyond this point additional 2
MR or MC

$2,500 MC
sales is lower than Marginal Revenue and Marginal Cost were computed using the data provided
$2,000
$1,500 additional cost. 3 Point for MR-MC = 0 was identified using Excel solver, constraint - # of Reps <=150
$1,000
$500
$-
Long Term Strategy
10 30 50 70 90 100 In the long term; as the economies of scale set in BAC should aim to maximize net income.
# of Sales Rep
Sales per Rep Sales cost per Rep

*Carryover Sales will not have an impact on optimal # of reps, as profit should be maximized each quarter and this will eventually maximize annual profits.

RESULT Hire 68 Sales Reps to maximize reach and at the same time optimize Reps productivity

• All the sales rep work at 100% capacity i.e. 0% shrinkage

ASSUMPTIONS • Sales and Cost functions follow a similar trend as in given data with increase/decrease in Reps
• Only operating expense is the Sales Representative cost
Product Launch Analytics – Case 2/2
OBJECTIVE To best predict the Q4 Sales Targets (in dollars) for BAC’s launched product

APPROACH Leverage past growth rates and market share to predict future sales
11 12 13 14 15 16
Identify Identify Calculate
Quarter on
repetitive repetitive monthly Forecast Q4 Forecast
Quarter
trends in trends in QoQ Company Industry Sales Q4 Company
change in
MoM growth industry sales Market Share using (2) Sales using (4)
Market Share
rates growth rates per city and (1)
*Refer to attached excel for exact growth rate and market share trends
RESULT ASSUMPTIONS

Q4’21 Combined Sales Oct Nov Dec 1 Similar trends in sales MoM and QoQ growth rates
Company Sales 149,646 161,991 174,337 2 Similar trend in change in market share of BAC
Industry Sales 1,540,255 1,667,326 1,794,397 *Detailed assumptions provided in excel