When prospecting, it is very important to focus on customers that generate higher Customer Lifetime Values (CLVs). What is a CLV? A CLV is the amount of recurring revenues less recurring direct service costs and one time fixed costs totaled over the contract tenure of the customer. A CLV gives a good idea of how financially attractive the customer is to your company. Focusing on high CLV customers will stand you in good stead as your company's compensation analysts and deals desk will love you and pay you more for acquiring or retaining customers with high CLV to your company. A high CLV customer translates to higher bottom line and a higher revenue run rate for the company . This FREE calculator is designed to let you capture data for e 3 prospective customers and then compute their CLVs so you can make appropriate decisions about which prospect(s) to focus on. This APP was created by Shiva Badruswamy of MobileForce Inc. Visit us at www.digitalmobileforce.com for more information about the APP and a link to a blog that further educates you on the challenges facing the digital era sales force.
The future versions of the APP will be designed to compute other deal yardsticks such as deal margins and payback period. These yardsticks are important to know when negotiating a deal as your likelihood of getting approval from your deals desk hinges on crossing these hurdle rates.
As always feedback and suggestions for improvement welcome on our website at www.digitalmobileforce.com.
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The result obtained from the model gives what is known as the Z-score. Low values indicate the company has a high probability of failing while high values predict the company is less likely to fail. In fact, Altman’s seminal work predicted correctly 72% of the bankrupted companies two years prior to the event.
However, the Z-score is an explanatory tool rather than an instrument to forecast business viability, and this tool should only be used as a baseline or a first approach to viability assessment. For instance, Altman himself suggests to analyse thoroughly those companies with lower Z-index values while resources and time can be saved with those obtaining higher values.
Unit fixed costs decrease with your sales, while unit variable costs are constant with sales; so then, as sales increase turnover allows for covering the variable costs (whenever selling price exceeds the unit variable cost) and part of the fixed costs. The break-even point is the level of sales when turnover will just cover both costs, leading the company to abandon loses.
The break-even point is the level of sales which is a minimum for the company to start making a profit. To obtain this in terms of units and currency, input the figures for your fixed costs, the variable cost and the unit price.
This calculator indicates you the number of units that allow your company or project to reach break-even, showing you the solution diagram, as well. Use it for simulating different scenarios of costs and prices.
(1) the cost of holding inventory, and
(2) the cost of ordering.
Both costs work in such a way that you need to balance them; there is a trade-off: stock too much and your holding costs will eat your profits, keep your ordering frequency at high levels and your ordering costs will increase.
For the sake of supply chain management efficiency there are many models available. However, one of the most utilised systems is back from 1913, the ‘Economic Order Quantity’ (EOQ) model, developed by Production Engineer Ford Harris.
This simple model allows to calculate the order size, and hereby the reorder point, that minimises the total cost of purchasing, ordering and holding stocks. The simplicity of the model resides in its ability to calculate such optimal quantity only considering three figures: demand, ordering cost, and holding cost.
This applications calculates the EOQ given an annual demand estimate, together with the total yearly orders and the total annual cost. Further, you can choose to calculate the EOQ when shortages may arise; the possibility of shortages may come from either a technical perspective (it is possible to backorder), or from a commercial possibility (customers do not cancel an order whenever there is no inventory available and wait for the backordering process).
If you consider demand is uncertain, then the calculator will make use of the 'Newsvendor model', and it will calculate the optimal monthly order given the selling price of the product, your costs, and the average monthly demand and its standard deviation. This is the most used model to calculate optimal order size when demand is unknown and only mean demand and demand variance is known.
This app calculates the probability that both actions are interconnected by using Fisher's exact test, an statistical technique which is widely used when samples are small (i.e. few customers surveyed).
The significance of the association is estimated by the mid p-value method. If this probability is below 5% consider there is an statistically significant association between the two actions.