Business Analytics: Mathematical Model, Costing and Revenue Behaviour, Advertising Impact on Sales

Module Business analytics

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
QUESTION 1...................................................................................................................................3
(a) Mathematical model...............................................................................................................3
(b)Profit or loss of KF Ltd. .........................................................................................................3
(c) graph of five-year projection from January 2023..................................................................4
(d) costing and revenue behaviour...............................................................................................5
QUESTION 2...................................................................................................................................7
(b) Scattered diagram and comment on the relationship between two variables.........................8
(c) Impact of advertising expenditure on sales and recommendation of relevant marketing
tactics...........................................................................................................................................8
QUESTION 3.................................................................................................................................10
(a) Computation of point of Break-even and percentage of margin of safety of 640 computer
sales............................................................................................................................................10
(b) Computation of sales volume that Basu Plc requirement to sale to accomplish target profit
for the year of £56000................................................................................................................11
(c) Formulation of Break-even chart for Basu Plc decently showing Break-even point and
margin of safety.........................................................................................................................12
(d) Critical analysis of benefits and limitations of the break-even model.................................12
CONCLUSION..............................................................................................................................14
REFERENCES................................................................................................................................1

INTRODUCTION
Business analytics is set of disciplines and technologies can be work for solving business
problems by with the help of using data analysis and statistical model and different types of
quantitative methods. It is involving methodical exploration of company's data with focus more
on statistical analysis in order to driving decision making. Data driven companies threat their
data as business assets which can be actively looked ways in to turn for getting competitive
advantages (Fernando and Engel, 2018). Then, success with business analytics depend on data
quality in which skill analysts in order to understand the technologies and business for
commitment to using data to gain insight inform business decision. For the present report first
report develop the mathematics model with the help of using costs informations that can be
provided by Joycelyn's influence diagram. Then, study calculating profit and loss of KF Ltd in
order to focus on same information given and prepare five year projection accordingly. Further,
it will compute the correlation coefficient between advertisement expenditure and sales revenue
for Wash well (WW) Ltd. Also, analysing impact of advertisement expenditures on sales in order
to describe relevant marketing tactic and lastly BEP of Basu Plc,or create chart in order to create
and evaluating benefits and limitation of break even model.
MAIN BODY
QUESTION 1
(a) Mathematical model
Total Cost (TC)= Fixed Cost(FC) + Variable Cost(VC)
= £100000 + £1800000
= £1900000
Variable Cost = Unit variable cost * Quantity produced
= £0.90 * 200000
= £180000
(b)Profit or loss of KF Ltd.
This can be assumed that all the units produced by the organization such as KF Ltd are sold in
the market.
Profit and Loss A/c
Particulars Details Am
Sales Revenue 200000 units * £3.00 per unit 600000

Less Variable cost 200000 units * 0.90 per unit 180000
Contribution 420000
Less Fixed cost 100000
Net Profit 4100000
(c) graph of five-year projection from January 2023
Unit
variable
cost
0.95
(0.90 * 106%)
1.01
(0.95 * 106%)
1.07
(1.01 * 106%)
1.13
(1.07 * 106%)
1.20
(1.13* 105%)
Unit
sales
price
3.15
(3*105%)
3.30
(3.15*105%)
3.47
(3.30* 105%)
3.64
(3.47* 105%)
3.82
(3.64* 105%)
Sales
unit
220000
(200000 *
110%)
242000
(220000 *
110%)
266200
(242000 *
110%)
292820
(266200 *
110%)
322102
(292820 *
110%)
Particulars Jan-2023 Jan-2024 Jan-2025 Jan-2026 Jan-2027
Sales
Revenue
693000
(220000*3.15
)
798600
(3.30*24200
0)
923710
(3.47*266200)
968968
(3.64*266200
)
1118572
(3.82*292
820)
Less
Variable
cost
209000
(220000*0.95
)
244420
(1.01*24200
0)
284834
(1.07*266200)
300806
(1.13*266200
)
351384
(1.20*292
820)
Contribution 484000 554180 638876 668162 767188
Less Fixed
cost 100000 100000 100000 100000 100000
Net Profit 384000 45180 538876 568162 667188