So I was given this case study at an Assessment Centre of a major retailer (think Amazon). A vendor needs help to forecast his Q4 sales based on a new product range that he wants to sell. Q3 performance: Sales revenue £400,000, product listed: 150, out of stock:17%. New product range includes 30 products and they are looking to improve their revenues by 20%. How would you predict their future sales after they introduce the new products?
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Hi Nathan, thanks for the answer. In terms of estimating the new products sales, can we assume a stock out rate of 17% aswell? If not, how would you project the new stockout rate? The way I approached this problem was by assuming no cannibalisation of products. So adding the 30 products in the current listing means 180 products will be sold. If we assume the same average price per product and the same number of units sold per product between the two periods, then only the number of products listed changes and the change in revenue is 180/150 = 20% increase which meets the target