Calculation of volume, revenue, and profit in simulations

The online simulator can be used to calculate volume, revenue, and profit using both default or custom formulas. You are also able to set the value of revenue/profit for different SKUs to zero, which is useful for competitor products.

Using the simulator to calculate volume, revenue and profit

Preference shares and revenue projections (assuming 1000 units offered) can be simulated to assist in adding or modifying product features.

By default, the simulator estimates Volume = 1000 × share, where thethe factor of 1000 is used for convenient scaling. However, if you know the actual volume of units sold in the market, you should use that instead of 1000.

Then Revenue = Price × Volume.

When calculating profit, you are able to account for both variable and fixed costs. Variable costs should be dependant on the share value, while fixed cost can simply be subtracted at the end of the formula. This gives the profit equation of the form Profit = share x (1 - variable cost) - fixed cost.

For each NPD you are able to enter a custom formula or select from one of the default formulas using the buttons on the right-hand side. The default calculations for volume, revenue, and profit all assume a market index of 1000 units.

Duplicating volume, revenue, price calculations (VRP) in simulations

You can now create and duplicate VRP calculations and apply them across various worksheets using the Duplicate calculations feature under the VRP settings drop-down menu, or by hovering over the worksheet title and clicking the Copy button.