Universal Pricing Calculations for Excel - find the product maximum price

The Universal Pricing Calculator evaluates price - demand curves to find the maximum price which produces the maximum profit for any product. The user needs to supply just two datasets, demand1 @ price1 and demand2 @ price2. From this information the program will give you the elasticity of demand, the demand quantity at the optimum price, the strength of demand and the maximum profit.

The second part of the program works out the optimum discount price to sell unsold capacity to maximise profits.

The third part of the program supplies a costing calculator which enables you to keep track of unit costs. Use these unit cost values in the pricing calculators to calculate profit margins.

Part 1 of the program solves this equation for maximum profit value:

Profit for period = Total Revenues - Total Costs.

At increasing price levels:

Total Revenues = the demand quantity (sales volume)*price.

Total Costs = the level of demand (sale volume)*unit cost.

Excel finds the exact Price at which:

Profit for period = Quantity*Price - Total Costs = Maximum value.

From the program instructions - Part 1.

1. Enter the product name and the unit costs. Use the Costing calculator to evaluate unit cost levels.

2. Enter the time period that the levels of demand and total profits are referencing.

3. Enter Quantity1 @ Price1 and Quantity2 @ Price 2 data values into cells I7/K7 & M7/O7.

4. The elasticity of demand E is displayed in cell F11, the strength of demand A in cell F15.

5. The price which yields maximum profits is displayed in cell F9, and the quantity of demand at this price in cell F10.

6. The Maximum Profit is in cell I10.

An easier way to see the relationship of price to demand to profit is to generate a Price - Demand - Profit Schedule and chart using the Schedules.

To create a demand chart enter a starting price for the chart a few units of price behind the calculated best price value into I12 and the increments in price you wish to chart to adopt into K12. Now turn to the Tables 1 page and see how the price - demand - profit chart changes with each increment in price.

Changing Demand Strength

The price - demand relationship shifts upwards or downwards as the overall strength of demand changes.

This shift changes the Price level calculations for maximum profits.

To recalculate the Price level for maximum profits as demand strength changes, enter the percentage change in demand into F16, to calculate a new value of A.

The new Price level for Maximum Profits and the new demand level at this Price are revealed in cells I15 & I16.

The Maximum Profit for the Period is recalculated in cell L16.

Quick Price -Max Profit Calculators for Multiple Products:

Use the calculator sets provided between rows 21 and 30 for quick calculations of Demand Strength , Demand Elasticity and the Price Point for Maximum Profits, Demand at Max price and Total Profit.

Calculates the discount price that will maximise profits by creating extra demand to sell spare capacity.

Calculates unit costs by reference to employee time costs, raw material costs output efficiencies.

Additional Information: Universal Pricing Calculations for Excel

OS : Windows XP, 95, 98, ME, NT/2000/2003

Excel 97 or later.

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