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Cases

Ohjelma
Bike Lease Finland

Bike Lease Finland

Leasing and maintenance of employee bicycles, digital services.

Ohjelma
Excelence Solutions

Excelence Solutions

Consulting and data analytics, expert services and consulting.

Ohjelma
Finnish Timber Oy

Finnish Timber Oy

Ecological log buildings and construction site processes, project business.

Ohjelma
Green Scape

Green Scape

Customized green wall services for B2B clients, service business.

Ohjelma
Marine Craft

Marine Craft

Customized motorboats, project delivery, manufacturing industry.

Ohjelma
Scandinavian Design

Scandinavian Design

Leasing and maintenance of company bicycles, digital services.

Task

Scenario Calculation


90

In this task, the student will create a scenario calculation on how changes in price or sales volume affect the profitability of the case company. They will prepare a basic calculation of the starting situation, define at least two alternative scenarios, calculate the results for them, and compare them. The goal is to learn how sensitive the result is to changes in sales and price, and what this means for company management.

Learning objectives

After completing the task, the student:
1. Can create simple scenario calculations regarding the impact of price and volume changes on profitability.
2. Understands the interdependencies between sales, costs, and results (basic cost–volume–profit thinking).
3. Can compare the results of different scenarios and assess their risks and opportunities.
4. Can make justified conclusions and action proposals for the management of the case company based on the calculations.

Step by step

  1. Scenario calculation of profitability

    Objective:
    The objective of the assignment is that the student understands how a change in price or sales volume affects the case company’s profitability and is able to prepare simple scenario calculations to support decision-making.

    Materials:

    • The selected case company description from the learning material.

    • A simple profitability calculation given by the teacher or built by yourself (e.g. information on sales volume, sales price, variable costs and fixed costs).

    • The assignment is based on this information and on well-grounded assumptions.

    Assignment steps (instructions for the student):

    1. Describe the starting point and prepare a baseline calculation

      • Briefly describe (5–8 sentences) what the case company sells and to whom.

      • Define in the starting situation:

        • sales volume (units or service performances)

        • sales price per unit

        • variable costs per unit

        • total fixed costs per year / per month.

      • Calculate the profitability in the baseline: revenue, contribution margin (sales – variable costs) and operating profit (contribution margin – fixed costs).

    2. Define the scenarios to be examined

      • Choose whether you examine a price change, a volume change or both.

      • Formulate at least two scenarios, for example:

        • Scenario A: “Baseline +10 percent volume”

        • Scenario B: “Price –5 percent”
          or for example an optimistic vs. pessimistic scenario.

      • Write briefly why these changes are realistic from the case company’s perspective (e.g. campaign, new competitor, increased capacity).

    3. Calculate scenario-specific results

      • Calculate for each scenario:

        • revenue

        • variable costs

        • contribution margin

        • fixed costs (usually assumed the same unless otherwise justified)

        • operating profit.

      • Present the calculations clearly, for example as table-like text, where you compare the baseline and each scenario.

    4. Compare and interpret the scenarios

      • Write 1–2 paragraphs comparing the results of the scenarios:

        • how much operating profit changes in euros and percentages

        • which variable (price or volume) appears to have a greater impact on profitability in this case.

      • Briefly consider how close to break-even the company is in each scenario.

    5. Draw conclusions and propose actions

      • Finally, write a 5–7 sentence summary explaining:

        • which scenario is most attractive for the company and why

        • which scenario represents the greatest risk in your opinion

        • what conclusions management could draw regarding pricing, sales targets or cost control based on the calculations.

    Submission and evaluation:
    Submit an output of about 1–2 pages showing:

    • the starting point description and baseline calculation

    • at least two clearly defined scenarios

    • scenario-specific calculations and comparison

    • conclusions and proposed actions.

    Evaluation focuses on how well:

    • the calculations are logical and correctly derived

    • the scenarios are realistic and well-grounded from the case company’s perspective

    • the student is able to interpret the results and draw practical conclusions from them.

    Recommended working time: approximately 45–60 minutes, individually or in pairs.

Tasks by audience and theme

University of applied sciences

Polytechnics and higher education studies.

68 tasks