Name Product name.

Price Unit price.

Promo Budget Amount spent to advertise and promote the product. Promotion Budgets drive awareness.

Sales Budget Amount spent on distribution systems and sales force. Sales Budgets drive accessibility.

Computer Prediction Only useful as a benchmark, this forecast is produced to allow you to see the impact Price, Promo Budgets and Sales Budgets have on demand. It assumes you are competing against a set of mediocre products, and does not have any information about actual competitors.

Last Year's Sales Total number of products sold in the previous year.

Your Sales Forecast Overrides the Unit Sales Forecast. If no value is entered, the spreadsheet will use he Unit Sales Forecast for all calculations. If a value is entered, the computer will use that number. You should always enter a prediction for unit sales that you have developed on your own. The computer’s forecast is only useful as a benchmark.

Gross Revenue Forecast Unit Sales Forecast times Price. The calculation assumes that enough units will be built to meet demand.

Cost of Goods The sum of material and labor costs. The Marketing spreadsheet may not be aware of 2nd Shift labor costs, since those are determined on the Production spreadsheet. It assumes that the current labor cost per unit figure on the Production spreadsheet is correct.

Contribution Margin Forecast Gross Revenue Forecast less cost of goods.

Less Promo & Sales Contribution Margin less associated promotion and sales budgets.

A/R Lag The Accounts Receivable Lag (in days) is the time between customers receiving products and when they are expected to pay for them. If companies offer no credit terms, demand falls to about 65% of normal. At 30 days, demand is 92%. At 60 days, demand is 98.5%. At 120 days, demand is 100%. The longer the lag, the more your cash is tied up in receivables. Take note of the Unit Sales Forecast numbers as the A/R Days are adjusted. Increasing the days creates more favorable terms for the purchaser, and the forecast increases.

A/P Lag The Accounts Payable Lag (in days) is the time between companies receiving material and when they are expected to pay for it. Increasing the lag improves your cash position since you are in effect getting a loan from your creditors. Suppliers get upset as the lag increases and withhold material for production. At 30 days, they withhold 1%. At 60 days they withhold 8%. At 90 days they withhold 26%. At 120 days, they withhold 63%. At 150 days, they withhold all of your material. Take note of the Production After Adj. numbers in the Production area. Increasing the A/P days creates less favorable terms for suppliers, and the Production After Adj. number falls.

Note: A/R Lag and A/P Lag are Finance decisions, and while they are entered on the Marketing spreadsheet, they are saved (and uploaded) as part of the Finance decision set.