Retail versus Commodity Events (Automobiles)

Comments

4 comments

  • Official comment
    Avatar
    Candi Clouse, PhD

    Hey Luke -

    It sounds like you have a pretty complicated project. You might consider a project consultation to get all of your questions answered. Just email support@implan.com for more information on that.

    1. The file with the margins is located in the article Margins & Deflators. Heading to the Commodities tab and then scrolling to 3402 - Retail services Motor vehicle and parts dealers you see that the margin is as Maria indicated: 0.254935305.

    2. For retail, the purchaser price doesn't include the price of the goods purchased, as IMPLAN doesn't know what was bought from the retailer. This is when you see your direct output = to the margins. The portion of that $1M the retailer gets to keep. When you use producer price, you are telling IMPLAN this $1M is all going to the retailer. You can see how it plays out by using the filters and examining your results for each of the scenarios you ran. Also, this article should help: Retail and Wholesale: Industry Margins.

    3. No. When you run $1M through industry retail, you are saying the retailer gets that $1M. When you run a commodity through auto manufacturing with producer price, IMPLAN is going to split the $1M in direct across the value chain - manufacturing, retail, wholesale, and transport. Again, I would suggest looking at the details in your results to see where that $1M is getting allocated in each scenario.

    Comment actions Permalink
  • Avatar
    maria_lucas

    Hi Luke,

    Could you provide a screenshot of how these events have been setup? You indeed should see only a portion of the $1M of Retail Automobile Sales (Purchaser Price) as Direct Output. The 2019 Margin for the auto dealership retail industry is 0.254935305448679, so I'd expect a Direct Output of about $254,935.

    After running these events on our end, it looks like your results are a combination for the retail Industry Purchase Price results and the Commodity Purchaser Price results. 

    Thank you,
    Maria 

    0
    Comment actions Permalink
  • Avatar
    Luke Daniels

    Hi Maria,

    Thank you for catching my mistake! You are correct, a $1M allocation to Retail Automobile Sales produces $254,935 in direct effects. So let me refine my list of questions:

    1. Where can we find the margins you speak of? I found the 2019 margin data for commodities and see 24.6%

    2. So modeling a retail event where margins = "purchaser price" only includes the markup of a good? And modeling a retail event where margins = "producer price" includes the markup of the good at the retail level, plus all the impacts from the supply chain?

    3. If my interpretation is correct, then shouldn't the results from a $1M commodity event  for automobiles (purchaser price) equal the results from a $1M industry event in automobile retail (producer price)?

    Thanks

    0
    Comment actions Permalink
  • Avatar
    maria_lucas

    Update: We've since written an article detailing these scenarios because we know others would benefit from this concept of comparing each Event setup - 

    https://implanhelp.zendesk.com/hc/en-us/articles/1260804533829-How-Output-is-Analyzed-in-Industry-and-Commodity-Events-with-without-Margins

    0
    Comment actions Permalink

Please sign in to leave a comment.