Exam 20: Marketing Arithmetic

The marketing manager for an established retailer of men's clothing is developing a sales forecast for the coming year. The manager constructs a graph that shows the dollar sales for each of the previous ten years. He then draws a line on the graph that shows the general upward direction in which sales have moved over the ten-year period. He assumes that this general positive progression will continue into the next year, and uses that as the basis of his forecast. What method of sales forecasting does this manager seems to be using?

Charles Mann, the manager of Sparkle Toothpaste, is estimating how many units of toothpaste his firm will be able to sell to young males in the 18-24 age group in his county. In short, he is

For years the trend in sales of disposable diapers moved closely with the number of new births. However, as the number of women in the work force increased and as more women returned to jobs after babies were born, use of disposable diapers rapidly increased. This is an example of

When a firm subtracts its cost of sales from its net sales, the amount left over is called:

A good marketing manager knows that:

Use the information below to answer the following questions that refer to Table B-1. Based on the information in Table B-1, net sales are: Table B-1 Gross sales \ 650,000 Returns \ 40,000 Allowances \ 10,000 Markdowns \ 20,000 Beginning inventory \ 50,000 Ending inventory \ 30,000 Expenses 25\% Stockturn rate 10 Investment \ 250,000

The total value AT COST of all the products sold during an operating period is the cost of sales.

Operating ratios (calculated from an operating statement) show various items from the statement as a percentage of net sales.

A weakness of the trend-extension method of sales forecasting is that it assumes past conditions will continue unchanged in the future.

If you want to forecast the sales of one of your major products, your first step probably should be to:

Relying on trend extension approaches for forecasting sales is a lot like going down a river in a canoe and steering the canoe

Use the information below to answer the following questions that refer to Table B-2. Based on the information in Table B-2, the markdown ratio is: Table B-2 Gross sales \ 240,000 Returns \ 20,000 Allowances \ 20,000 Gross margin 25\% Beginning inventory \ 50,000 Ending inventory \ 50,000 Expenses \ 40,000 Markdowns \ 30,000 Investment \ 50,000

Which of the following depicts a common top-down approach to forecasting?

The factor method is widely used by producers of consumer products, but it isn't relevant for producers of business products.

Return on investment and return on assets are both measures of how effectively a firm uses its resources.

When salespeople engage in sales forecasting:

A marketing researcher estimates that all the users and potential users of a special industrial tool might buy about $600,000 worth next year. The marketing manager for one firm that sells the tools knows that her company sold $80,000 worth of tools last year and that her profits will be about 10 percent of sales. The market potential in this case is probably about:

The main purpose of an operating statement is to determine a company's net profit over a specified period of time--and present data to support that figure.

Once a specific forecast is developed, we can ascertain why sales vary.

Regarding operating statements: