IDIS 240 Final Exam - Vestal
When Ordering a product - ✔️✔️You should always order enough to stock on hand to
where customers can buy whatever they want, whenever they want.
4 Steps of the Sales Process - ✔️✔️1. Attention
2. Discovery
3. Solution
4. Commitment
Lone Star Electric Supply - ✔️✔️Guest Speaker: Jason Roberson
Siemens - ✔️✔️Guest Speaker: Glen Irving
SunSource - ✔️✔️Guest Speaker: Tom Liversay
Valero - ✔️✔️Guest Speaker:
Cash Discounts - ✔️✔️given to encourage buyers to promote payment promptly.
Special Orders - ✔️✔️instructions given by the buyer on how to deliver or manufacture
the order.
Minimum Order vs. Freight Allowed - ✔️✔️Minimum order:
The minimum amount you can order from a manufacturer
Freight Allowed:
manufacture pays for the shipping and just adds to the cost.
Claims - ✔️✔️request for payment from the insurance company to cover financial
losses.
Returns - ✔️✔️goods returned to the business that sold them
Operating Expense (OE) - ✔️✔️all costs needed to provide necessary services.
SG&A - ✔️✔️Selling, General and Administrative Expense
,EBITDA: Earnings before interest, Taxes, depreciation, and amortization - ✔️✔️=
Margin - OE - SG&A
EBIT - ✔️✔️EBITDA - Depreciation and Amortization
Interest Expense - ✔️✔️Not part of operating cost
NPBT - ✔️✔️Net profit before taxes
NPAT - ✔️✔️Net profit after taxes
Accounts payable - ✔️✔️Money the distributor owes the manufacturer
Accounts Receivable - ✔️✔️money the customer owes us
Days Sales Outstanding - ✔️✔️Receivable Dollars * (365/sales)
Inventory - ✔️✔️What we have on hand to sell
Inventory Turn - ✔️✔️= (COGS from inventory / Average Warehouse Inventory)
Gross Margin Return on Inventory Investment (GMROII) - ✔️✔️= (Gross Margin
Dollars Earned on Warehouse Sales/ Average Warehouse inventory)
COGS - ✔️✔️= Cost of Merchandise + Freight from Manufacturer
FOB Destination - ✔️✔️manufacturer pays for the freight
FOB Shipping Point - ✔️✔️distributor pays for the freight
Cost of Merchandise - ✔️✔️Trade Discounts
Trade Pricing
Commodity Pricing
Deviations from the Price of the Merchandise
Trade Discounts - ✔️✔️Usually a discount off of a published list price or other
published price.
Trade Pricing - ✔️✔️Also know as other names such as "matrix pricing" or just
"pricing".
Two drivers to growth of this type
Increasing complexity
System capabilities
, Commodity - ✔️✔️Products that have very little measurable difference between
suppliers.
Pure commodities are typically refer to raw materials such as copper, gold, chemicals,
etc.
Commoditization - ✔️✔️Difference between products has narrowed over time.
Common among products that have pure commodities as a large portion of the finished
product.
Examples include dimensional lumber, PVC pipe, aluminum and copper wire, etc.
Deviations from Standard COGS - ✔️✔️OEM example
Ship from Stock and Debit
Construction Projects
Meet competition
Meet Budget
Reduction in value (such as electronics)
UOM - ✔️✔️Unit of Measure
Selling Price - ✔️✔️= COGS + Margin
Or = COGS + Markup
Percent Markup - ✔️✔️= (Selling Price - COGS/COGS)*100%
Percent Gross Margin - ✔️✔️= (Selling Price - COGS/Selling Price)*100%
Selling Price with Known Percent Markup or Percent Gross Margin - ✔️✔️Selling Price
= COGS*(100% + Percent Markup)
Selling Price = COGS/(100% - Percent Gross Margin)
Converting PMU to PGM - ✔️✔️Percent Markup = (Percent Gross Margin/ 100% -
Percent Gross Margin)*100
Percent Gross Margin = (Percent Markup/ 100% + Percent Markup)*100
Passing on Discount and Reductions - ✔️✔️Be careful not to pass on all of the
discount and reductions
When Ordering a product - ✔️✔️You should always order enough to stock on hand to
where customers can buy whatever they want, whenever they want.
4 Steps of the Sales Process - ✔️✔️1. Attention
2. Discovery
3. Solution
4. Commitment
Lone Star Electric Supply - ✔️✔️Guest Speaker: Jason Roberson
Siemens - ✔️✔️Guest Speaker: Glen Irving
SunSource - ✔️✔️Guest Speaker: Tom Liversay
Valero - ✔️✔️Guest Speaker:
Cash Discounts - ✔️✔️given to encourage buyers to promote payment promptly.
Special Orders - ✔️✔️instructions given by the buyer on how to deliver or manufacture
the order.
Minimum Order vs. Freight Allowed - ✔️✔️Minimum order:
The minimum amount you can order from a manufacturer
Freight Allowed:
manufacture pays for the shipping and just adds to the cost.
Claims - ✔️✔️request for payment from the insurance company to cover financial
losses.
Returns - ✔️✔️goods returned to the business that sold them
Operating Expense (OE) - ✔️✔️all costs needed to provide necessary services.
SG&A - ✔️✔️Selling, General and Administrative Expense
,EBITDA: Earnings before interest, Taxes, depreciation, and amortization - ✔️✔️=
Margin - OE - SG&A
EBIT - ✔️✔️EBITDA - Depreciation and Amortization
Interest Expense - ✔️✔️Not part of operating cost
NPBT - ✔️✔️Net profit before taxes
NPAT - ✔️✔️Net profit after taxes
Accounts payable - ✔️✔️Money the distributor owes the manufacturer
Accounts Receivable - ✔️✔️money the customer owes us
Days Sales Outstanding - ✔️✔️Receivable Dollars * (365/sales)
Inventory - ✔️✔️What we have on hand to sell
Inventory Turn - ✔️✔️= (COGS from inventory / Average Warehouse Inventory)
Gross Margin Return on Inventory Investment (GMROII) - ✔️✔️= (Gross Margin
Dollars Earned on Warehouse Sales/ Average Warehouse inventory)
COGS - ✔️✔️= Cost of Merchandise + Freight from Manufacturer
FOB Destination - ✔️✔️manufacturer pays for the freight
FOB Shipping Point - ✔️✔️distributor pays for the freight
Cost of Merchandise - ✔️✔️Trade Discounts
Trade Pricing
Commodity Pricing
Deviations from the Price of the Merchandise
Trade Discounts - ✔️✔️Usually a discount off of a published list price or other
published price.
Trade Pricing - ✔️✔️Also know as other names such as "matrix pricing" or just
"pricing".
Two drivers to growth of this type
Increasing complexity
System capabilities
, Commodity - ✔️✔️Products that have very little measurable difference between
suppliers.
Pure commodities are typically refer to raw materials such as copper, gold, chemicals,
etc.
Commoditization - ✔️✔️Difference between products has narrowed over time.
Common among products that have pure commodities as a large portion of the finished
product.
Examples include dimensional lumber, PVC pipe, aluminum and copper wire, etc.
Deviations from Standard COGS - ✔️✔️OEM example
Ship from Stock and Debit
Construction Projects
Meet competition
Meet Budget
Reduction in value (such as electronics)
UOM - ✔️✔️Unit of Measure
Selling Price - ✔️✔️= COGS + Margin
Or = COGS + Markup
Percent Markup - ✔️✔️= (Selling Price - COGS/COGS)*100%
Percent Gross Margin - ✔️✔️= (Selling Price - COGS/Selling Price)*100%
Selling Price with Known Percent Markup or Percent Gross Margin - ✔️✔️Selling Price
= COGS*(100% + Percent Markup)
Selling Price = COGS/(100% - Percent Gross Margin)
Converting PMU to PGM - ✔️✔️Percent Markup = (Percent Gross Margin/ 100% -
Percent Gross Margin)*100
Percent Gross Margin = (Percent Markup/ 100% + Percent Markup)*100
Passing on Discount and Reductions - ✔️✔️Be careful not to pass on all of the
discount and reductions
