Well, Dennis, as Karen indicates, it's not quite that simple. Let's say that I have $100,000 in sales with the COGS exactly $50,000. Then let's say that you have $200,000 in sales at a COGS of $150,000. We each brought in $50,000 in gross margin, but my $50,000 cost the firm less than your $50,000. So, in one sense, our respective efforts are of equal value to the firm, but in another sense, there's a 3-fold difference. I think Karen's trying to help her client come up with a way to assess this "gap" between dollars and sense, IYPPTP.
Karen, if that's right, I'll break out a couple of my management texts, and see if I can find a good approach. Later, Steve in Memphis ----- Original Message ----- From: "Dennis McGrath" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Thursday, November 07, 2002 8:52 AM Subject: Re: Statistics experts needed > Karen, > > Seems to me that profit margin is the profit dollars, not the > percentage. > > If that is the case, your job is easy. > > --Dennis McGrath > > --- tellef <[EMAIL PROTECTED]> wrote: > > > > I guess I was sleeping when they taught this... I want to > > know if there is an established business statistics theory > > for what I want to do. A client has a simple salesperson's > > profitability report, and he wants it sorted from highest > > profit margin to lowest. We have an RBase report to do this, > > and the report looks like this: > > > > #Sales Sales$ Avg$ Profit% > > Salesman1 1 150 150 30% > > Salesman2 50 10000 200 25 > > Salesman3 40 15000 375 20 > > > > Obviously sorting by Profit% is misleading. Salesman1 isn't > > exactly their 'best' salesman! Salesman2 had the highest > > number of sales and the highest profit% (after the loafer #1). > > But Salesman3 had highest total sales$ and average$! > > > > Is there a way to WEIGHT the profit%? And what's the best > > indicator of the 'best' salesman? Is it the Total Sales$, > > the Average$, the number of items sold? I guess if there's > > a formula to weight the profit% then I could ask my client > > what other parameter is the most important to them. > > > > > > > > Karen > > > > > > ================================================ > > TO SEE MESSAGE POSTING GUIDELINES: > > Send a plain text email to [EMAIL PROTECTED] > > In the message body, put just two words: INTRO rbase-l > > ================================================ > > TO UNSUBSCRIBE: send a plain text email to [EMAIL PROTECTED] > > In the message body, put just two words: UNSUBSCRIBE rbase-l > > ================================================ > > TO SEARCH ARCHIVES: > > http://www.mail-archive.com/rbase-l%40sonetmail.com/ > > ================================================ > TO SEE MESSAGE POSTING GUIDELINES: > Send a plain text email to [EMAIL PROTECTED] > In the message body, put just two words: INTRO rbase-l > ================================================ > TO UNSUBSCRIBE: send a plain text email to [EMAIL PROTECTED] > In the message body, put just two words: UNSUBSCRIBE rbase-l > ================================================ > TO SEARCH ARCHIVES: > http://www.mail-archive.com/rbase-l%40sonetmail.com/ ================================================ TO SEE MESSAGE POSTING GUIDELINES: Send a plain text email to [EMAIL PROTECTED] In the message body, put just two words: INTRO rbase-l ================================================ TO UNSUBSCRIBE: send a plain text email to [EMAIL PROTECTED] In the message body, put just two words: UNSUBSCRIBE rbase-l ================================================ TO SEARCH ARCHIVES: http://www.mail-archive.com/rbase-l%40sonetmail.com/
