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Last week I posted a blog and video about product modeling with MS Excel. I kept it pretty simple just to give you an idea about how to start doing this.
Well this week I am expanding on the concept. We’re going to take the model we created last week and instead of showing sales in dollars based on an assumption about monthly growth, we are going to lay out a table in terms of sales volume (units) and then create a second table that figures the sales dollars based on specific monthly volume. You will see that this gives us much greater flexibility in terms of how we lay out our sales.
This is especially important for cyclical businesses. You can’t just assume a steady monthly increase. Some months will go down in sales. When you have it broken out in units, then you have complete freedom and flexibility to adjust your sales trends. As you will also see in the video you can of course use some simple formulas to accomplish certain trends as you need to, and then you can overwrite those formulas as needed as well.
Next week we’ll add another dynamic to this. Sales people. What if you want to figure in that based on “X” number of sales people, and “Y” number of sales generated by each sales person? We’ll take a look at how you can begin setting that up in Product Modeling part 3.
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