Single SKU Economic Model Variables

By Patrick Moorhead - September 15, 2015


Moor Insights & Strategy created an economic model to demonstrate the impacts of having multiple handset SKUs on profitability.

Handset Single Sku Model Variables

The following are the variables used in the single SKU economic model.

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  • Market volume
  • # OEMs (equal share)
  • volume/OEM
  • Design/test time
  • Labor costs (for NRE)
  • BOM consolidation/efficiencies
  • Initial SKU staffing
  • Staffing for additional SKU
  • NRE (initial SKU)
  • NRE add'l SKUs)
  • Total NRE/SKU
  • Channel Variable costs/SKU
  • Unit volume/SKU
  • NRE/unit
  • eBOM+NRE/unit
  • Inventory Turns
  • Channel Fixed costs/SKU
  • Channel Variable costs to engage
  • Effective cost per unit
  • Unsold units per SKU
  • % unsold units repurposable
  • Units repurposed
  • Units unsold
  • WC tied up in Inventory
  • Constant market price
  • Cost plus price
  • Elasticity factor
  • Opportunity cost of unsold inventory

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.