why did you take the per catalogie route

Fashion mail order
New answer on Feb 29, 2020
2 Answers
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Vaibhav asked on Feb 13, 2020

For some one who doesnt know the industry / sector - would not be able to imagine per catalogue price. Why cant we simply take total reve / costs of total sales. It yields the same inferance.

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Luca
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replied on Feb 29, 2020
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello Vaibhav,

You are right, to address the problem you can consider the total revenues and costs. Anyway, in order to answer any additional question about the business, it's important to understand and split the different factors considering at least price per unit, volume, fixed costs and variable costs.
You can have a proof of this reading the other questions in the text.

Best,
Luca

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Ian
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replied on Feb 17, 2020
MBB | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep

Because looking at it from the macro level is too simple. You don't just need to see whether the business is profitable or not, but why. Is this a pricing issue, a quantity sold issue, or something else? Look at the Revenue Estimate Tree chart on the right.

The micro-level breakdown helps you understand the business, products etc. to a much better degree.

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Luca gave the best answer

Luca

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BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached
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