Lab #4 – How to Guesstimate Anything PDF

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Bu111 Lab 4 - guesstimation prep questions...

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Anna Vo BU111 October 17, 2020 Lab #4 – How to Guesstimate Anything 1. Market Size of Toothpaste a. Assumption: Everyone uses toothpaste about twice per day.  Population in Canada – everyone uses toothpaste.  On average, most Canadians will brush their teeth twice a day.  Canada Average Retail Price of Toothpaste is about $3-4. b.

Canadian population

# of times used per day

# of days per year Cost per tube of toothpast

c. Toothpaste sales accounted for the highest value in the Canadian oral hygiene market in 2019, with total sales of $345.8m (MarketLine 2020). d. To refine this estimation, one can group different types of toothpaste brands and the cost for each, as well as on average how long each tube of toothpaste will last which will determine the # of sales a consumer will purchase their toothpaste. 2. The distance of all first-year BBA students a. Assumption:  The distance would be how far it would be if all first-year BBA students laid down from head to toe in a straight line. Not including double degree programs.  Distance is calculated in cm.  About 40% of the business students are girls and 60% are boys.  The average height of girls is 162.3 cm (5’4”) and the average height of boys is 175.1 cm (5’9”) in Canada (Shields, Gorber, Janssen &Tremblay 2011).  There are about 1200 students in first year BBA.

b.

X % of girls

X average height of girls

X % of boys

X average height of boys

# of students in bba

c. The distance would be about 203,976 cm (2.04 km)  1200 X 40% X 162.3 cm = 77,904 cm  1200 X 60% X 175.1 cm = 126,072 cm  126,072 cm + 77,904 cm = 203,976 cm d. To refine this estimation, one can group different types of height, for example, > 4’9”, 5’0”-5’3”, and so on. Also to get a more accurate percentage of how many girls and boys there are in the BBA program and the number of total students.

3.

Annual Sales of Netflix Subscriptions a. Assumption:  There’s 1 account for every household.  There are about 6.5 million subscribers in Canada (Townsend 2019).  The averages Netflix subscription cost about $14.99. b.

# of subsriptions per year

Cost of subscription per year ($14.99 X 12 months)

Annual sales

c. Annual sales of Netflix subscription is $780 million in Canada (Townsend 2019). d. There are 3 different plans (Basic - $9.99, Standard - $14.99, Premium - $18.99), so by calculation the # of subscribers for each plan per month, this can refine the estimation. 4. Birdbrain’s Monthly Profit

a.

Assumption:  Assume Birdbrain sell all 400,000 units.  Total cost per unit is $5 plus the variable labour cost $3 = $8  The price per unit is $20.  The overhead labour, utilities, and facility maintenance cost of $15,000 is per month.

b.

price per unit $20 revenue quantity 400,000 profitability fixed $15,000 cost

cost per unit $5

variable labour cost $3 c. The monthly profits is 4,785,000 if they sold all units produced.  Profit = revenue – cost  Total cost is 15,000 + 400000 X (5+3) = $3,215,000  Total revenue is $8,000,000 d. To refine this estimation, know how many retailers/stores sell their product and from there gather information on how birdhouses are sold per month.

Reference MarketLine. (2020, June). Oral Hygiene in Canada. Retrieved October, 2020, from https://advantage-marketline-com.libproxy.wlu.ca/Analysis/ViewasPDF/canada-oral-hygiene101814 Shields, M., Gorber, S. C., Janssen, I., & Tremblay, M. S. (2011, August). Bias in self-reported estimates of obesity in Canadian health surveys: An update on correction equations for adults. Retrieved October, 2020, from https://www150.statcan.gc.ca/n1/en/pub/82-003x/2011003/article/11533-eng.pdf?st=WvU1KceY Townsend, K. (2019, December 17). Netflix reveals its official Canadian subscriber count, revenue. Retrieved October, 2020, from https://mediaincanada.com/2019/12/17/netflix-revealsits-official-canadian-subscriber-count-revenue/#:~:text=Netflix has earned an estimated,6.5 million as of Sept....