Profit in store vs e-shop

Problem definition

An unnamed company that sells carpets has its own store in Prague. During COVID-19 the company reopened an e-shop, so it currently has two mutually supporting sales channels. Both types of stores have their advantages and disadvantages. At the same time, there are various factors that affect the profit. Examples of these factors are the following: customer satisfaction and needs (carpet quality, order processing speed, price, etc.), expenses (advertising, rent, employees, etc.), the possibility of expansion, etc. To ensure customer satisfaction the company should make some expenses.

The goal of this simulation is to find out what parameters can increase profit the most (individually for each type of store), to find a balance between expenses to satisfy the customers in order to achieve the profit, and in the end to compare these parameters.

Method

The Vensim program is used as a modeling tool, which makes it possible to display and simulate the dynamics of the entire system.

Variables

Profit

= revenue - cost
Units: CZK

Cost

= fixed cost e-shop + fixed cost store + variable cost e-shop + variable cost store
Units: CZK

Revenue

= revenue e-shop + revenue store
Units: CZK

Fixed cost e-shop

= salary * employments e-shop
Units: CZK

Fixed cost store

= salary * employments store + building rent
Units: CZK

Variable cost e-shop

= 5000 + advertising budget + gifts + sales
Units: CZK

Variable cost store

= 5000 + gifts + sales
Units:  CZK

Building rent

= 50000 + parking
Units: CZK

Salary

= 25000 * opening hours
Units: CZK

Employments store

= 15 

Employments e-shop

= 1

Opening hours

= IF THEN ELSE(holiday=1, 1.25 , 1 )

Holiday

= RANDOM UNIFORM(0, 1, 1)

Parking

= 5000
Units: CZK

Revenue e-shop

= price * quantity sold e-shop * (1+(advertising budget-0.5))
Units: CZK

Revenue store

= price * quantity sold store * (1+(advertising budget-0.5))
Units: CZK

Quantity sold e-shop

= 5000
Units: m^3

Quantity sold store

= 3000
Units: m^3

Price

= 150 + delivery
Units: CZK

Delivery

= IF THEN ELSE(order cost>5000, 0 , IF THEN ELSE(order weight<5, 159 , IF THEN ELSE(order weight>5 :AND: order weight<15, 289 , IF THEN ELSE(order weight>15 :AND: order weight<30, 399 , IF THEN ELSE(order weight>30 :AND: order weight<50, 599 , IF THEN ELSE(order weight>50 :AND: order weight<75, 799 , IF THEN ELSE(order weight>75 :AND: order weight<100, 999 , IF THEN ELSE(order weight>100 :AND: order weight<150, 1389 ,  IF THEN ELSE(order weight>150 :AND: order weight<300, 1649 , IF THEN ELSE(order weight>300 :AND: order weight<400, 1749 , 1979 ) ) ) ) ) ) ) ) ) )
Units: CZK

Order weight

= RANDOM UNIFORM(1, 500, 1)
Units: kg

Order cost

= RANDOM NORMAL(200, 100000 , 5000 , 2000, 1000)
Units: CZK

Gifts

= IF THEN ELSE(order cost>2000, 500, 0 )
Units: CZK

Sales

= 1-0.1
Units: CZK

Customer satisfaction

= customer satisfaction grow

Customer satisfaction grow

= customer satisfaction e-shop + customer satisfaction store

Customer satisfaction e-shop

= 
Units: 

Customer satisfaction store

= 
Units: