Forecast Summary & Breakeven Analysis For our new spring athletic shirt launch we project the fifth month of production (first month of sales) to yield total revenue of $69,440. This translates to a total volume of 1,736 units produced and sold. These figures were calculated by assuming that each order placed has an average volume of 20 units with a sale price of $40 per unit (see Table 1).
Furthermore, if we assume that revenues remain at this level for future months, we can expect to breakeven after 3.5 months of sales. At our breakeven point we will have cumulative sales totaling $240,000 with a corresponding volume of 6,000 units produced and sold.

Sensitivity Analyses In addition to the base case forecast and analysis above, we altered some variables (e.g., unit price, order volume, shirt cost, and fixed costs) to conduct sensitivity analyses to better understand our projected revenue, volume production, and breakeven points (see Table 2). While each scenario produced unique outcomes, we were able to derive three key takeaways.
First and foremost, we must ensure unit costs do not rise. While maintaining the same forecasted revenue, a 20% increase in unit cost has a significant and unfavorable effect on breakeven points.
Secondly, raising unit price and/or order volume predictably yields favorable scenarios. While revenue experiences increases, the changes to our breakeven points are not as significant.
Finally, lowering fixed costs produces the most favorable changes across the board. Even though forecasted revenue remained unchanged, we noted the lowest breakeven revenue and volume. Breakeven time remains approximately 3 months across all favorable scenarios.

Advertising Budget & Lead Analysis Our advertising budget for the shirt campaign totaled $150,000. Of that, $125,000 was allocated to online (search engine) advertising and $25,000 to print ads. After analyzing responses to date, we observed that 44% of hits resulted from print ads while the remaining 55% came from online advertising. Even though online spending is responsible for over half of the responses, print ads appear to be the more effective medium.
Moving forward, there should be an increase in the print advertising budget to diversify and expand the medium. Additional budget allocation will allow us to explore the possibility of adding print ads in magazines, newspapers and possibly out of home (place-based) media such as billboards and posters. Furthermore, after conducting a lead source analysis we observed that warm and cold leads were responsible for 36% and 22% of the forecasted cumulative revenue, respectively (see Chart 1). It is our recommendation that we focus our marketing budget to further develop and exploit these lead sources to continue to drive revenue in future months. Finally, to improve forecasting and performance we plan to internally gather data with regards to Marketing Qualified Leads per Channel and Marketing Generated Revenue. Identifying what marketing channels are more effective, and the total revenue attributable to marketing, will allow us to continue to assess and refine our marketing/advertising spend, effectiveness, and potential expansion into additional mediums, such as television.