Situation
A small soft drinks player asked us to model the COGS for their canned soft drinks business for different volume thresholds
What we did
Over the project we:
- Split the COGS into the different components, identifying which were the main drivers of cost
- Interviewed key players in the industry to establish the key cost drivers, establishing what was fixed and what was variable – this included equipment costs, changeover times, line speeds, truck fill rates and level of competition
- Analysed the company’s existing quotes at different volumes and their distribution costs for different destinations
- Modelled the change in costs for different volumes
- Worked out reasonable upper and lower limits for these estimates and created a higher and lower COGS estimate for the different volumes
- We highlighted the unknown factors such as future inflationary drivers
Results delivered
The client is using our modelling to support the raising of finance for the expansion of their business