Case Study Of Easy Speaks: Goal-Seek Analysis

Next, Easy Speaks utilized goal-seek analysis and scenario analysis to help the company determine how many units are needed to be sold to get a specific Gross Profit. For the goal-seeking analysis, the first situation was to see how many units of Product B needs to be sold in order to reach the $150,000 Total Gross Profit goal. It was concluded that the Sports Flex speaker (Product B) would need to sell 5669 units for that goal. The second situation was to see how many units of Product B needs to be sold in order to reach the $200,000 Total Gross Profit goal. It was also concluded that the Sports Flex speaker (Product B) would need to sell 8997 units for that goal. Because Product B had 4500 units sold in 2015, it is possible to get more units sold of this product only and still the Gross Profit goals.
Then, the company conducted three different scenarios of altering the product pricing mix in order to determine their impacts to Total Gross Profit. The First Scenario was to see the impact of raising Product B’s price by $6.00. Even though this caused sales of Product B to fall by 600 units and sales of Product C to increase by 500 units, this was very profitable. The
However, Product B would not reach its Target Units to be Sold (5130). Instead, Product B would only reach 4530 units, but Product C would be well over the Target Units to be Sold which is a good thing for Easy Speaks. In conclusion, the first scenario of Product B price increase would not only be the most profitable out of all the scenarios, but also it would allow the company to reach and go over their first goal of $150,000 of Total Gross Profit. I would recommend the company apply the first scenario. Although the second scenario meets Product B and Product C’s Target Units to be Sold, the Scenario Summary tab in Excel shows that is not the most profitable