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Statistics in Sales

Statistics in Sales. June 2007, Alex Righolt. Overview. We don’t sell cheap products. The client decides whether a product is cheap or not. That is why we instead use the word “economic”.

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Statistics in Sales

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  1. Statistics in Sales June 2007,Alex Righolt

  2. Overview • We don’t sell cheap products. The client decides whether a product is cheap or not. That is why we instead use the word “economic”. • We’ll look at the terms “Total Cost of Ownership” and “Price Quality Ratio” that allow us to compare prices.

  3. Overview • This presentation also introduces the “Mean Time Before Failure” and “Failure Rate” that allow us to compare reliability.

  4. TCO Meaning: Total Cost of Ownership. • Definition: TCO = Direct Costs + Indirect Costs. • Direct costs: usually cost of purchase • Indirect costs: consumables + maintenance + repairs + energy consumption.

  5. TCO A $300 laserjet printer becomes more economic than a $100 inkjet printer after 5,000 printed copies. At 10,000 copies: the TCO of the inkjet is $550 the TCO of the laserjet is $350.

  6. PQR • Meaning: Price Quality Ratio • Definition: PQR = Price Quality

  7. PQR • Example: Shop A sells a PC at $700. It is 50% better than a PC sold at $500 in shop B. PQRA = $700 / 1.5 = $466 PQRB = $500 / 1.0 = $500 It shows that the PC sold at shop A is a better deal, even if its price is higher.

  8. MTBF • Meaning: Mean Time Before Failure • Definition: The average time between failures. • The MTBF is used to measure reliability of items. • The Rate of Failure is calculated as: RF = Failures Millions of hours

  9. MTBF This ‘bath tub’ graph shows the typical Rate of Failure over time.

  10. Analysis of situation 2 • The graph shows that many devices fail early in their life cycle. Ideally, this period is covered by warranty. • After that the Rate of Failure is lower and constant. • Near the end of its lifetime it increases again. • For consumer electronics, The Rate of Failure is lowest in the period of 3 months to 7 years.

  11. Conclusion • You have seen how TCO and PQR are used to describe and compare the costs of a product. • MTBF is used in expressing reliability.

  12. Statistics in Sales. The end

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