Framework library
Price-volume-mix bridge
How to use it
Reconcile the change between two periods into price, volume and mix effects using a stated convention. Add cost changes separately when explaining profit.
Worked example
Compare footwear sales by style at common prices to isolate mix. Then reconcile the remaining movement to realised price and unit cost.
Common pitfall
Price and volume interact. State where the interaction term goes and reconcile back to the observed total.
- Frame the questionWhich unit, period and cost convention make the alternatives comparable?
- Apply the frameworkUse Price-volume-mix bridge on the worked example above.
- Produce an answerShow the base case, one downside and the threshold where the decision flips.
Apply it to a case
Read the companion story: The sales record with a smaller profit