Price Increase Impact Audit
Check the maths of raising prices.
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Audit a planned price increase. Current prices, costs, volumes and a proposed increase: [PRICE_DATA]. Customer types and alternatives available: [CUSTOMER_ALTERNATIVES]. Contracts or notice rules I know of: [NOTICE_RULES]. Calculate break-even volume loss for the increase, the effect on margin, and scenarios for small, medium and large customer loss using my numbers. Segment customers by sensitivity and relationship, and suggest a communication approach. Note what data is missing. Return a table with Scenario, Revenue, Margin and Difference, a verdict in red, amber or green on risk, and a staged rollout plan with a review date. Contract and notice terms are [VERIFY] for [JURISDICTION]. Also suggest which customers to inform first, which to grandfather for a period if the numbers allow, and how to measure the effect over the next quarter. Include a short script for a customer who objects, based only on reasons I can honestly give. Then prepare the rollout as a project. Build a timeline from decision to effective date, with tasks, owners and approvals; a list of customer segments with the message, the channel and the date for each; and a script for staff who will answer questions. Draft three messages under 150 words: for loyal customers, for price-sensitive customers and for contract customers whose terms restrict changes. Include a monitoring plan for the first eight weeks, with the measures to track, the thresholds that trigger review, and a rule for reversing or adjusting. Add a section on risks: lost customers, reputational harm and legal notice requirements, which must be confirmed [VERIFY] for [JURISDICTION]. Finish with a one-page summary for the owner that states the expected effect under three scenarios, using only my figures, and the decision rule I have agreed in advance. Separate arithmetic errors, judgement calls and policy questions into three lists. Keep language factual, tag regulatory points [VERIFY] for [JURISDICTION], and leave final decisions to me and my adviser.
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Arithmetic (invented figures) Current price 40, cost 22, margin 18 per unit; sales 500 units a month. Increase to 44 gives margin 22 per unit. Break-even volume loss: 500 x 18 = 9,000 margin now; at 22 margin, 9,000 / 22 = 409 units. So volume can fall about 18% before profit drops. Scenarios: lose 5% (475 units): margin 10,450. Lose 15% (425): 9,350. Lose 25% (375): 8,250. Segments: contract customers need notice; check terms [VERIFY]. Verdict: green for small loss, amber if more than 18%. Review after eight weeks.
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