M7-S1 Session Notes
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Discussed a case with company 'ABC' with a 'herbalife' or 'tupperware' like business model with 150000 agents and a turnover of 150000 agents. The EU would hold this company responsible to pay taxes over a portion of revenue generated through these agents. An earlier agreement a 58% consumption of own use was considered reasonable.
How would you tackle this case: Brainstorm in our team was to use the 5 why an how technique:
- 5 Why and How?
- Who?
- Sampling
- Stratify for geography, revenue
- Sampling
- What?
- At what margin did you sell?
- Product consumption
- How frequently do you use the product?
- What is the shelf life time?
- Agent revenue
- How much is for own use?
- How much to famility and friends?
- How much are you able to sell to new customers?
- How much did you sell to a reseller?
- How much do you give away?
- Did you buy the products directly from ABC?
- How many product did you sell?
- How much products did you buy?
- How many product did you sell at reduced price?
- How much of your stock got stolen?
- How many customers do you have?
- How much of the
- Product consumption
- Where?
- Why?
- How?
- Who?
Key points from the session:
- How to get the data?
- What is the average 'own use'?
- What is the variance on the average?
- What is the 95% Confidence interval?
- Tax authorities would argue that the average would be closer to the left tail of the distribution.
