What is the formula for calculating the SPPD?

The formula for calculating the Sales Per Point of Distribution (SPPD) is correctly identified as item dollar sales divided by the distribution (which can be either weighted or as a percentage of stores). SPPD is a crucial metric in category management as it allows retailers and manufacturers to understand how much revenue each point of distribution generates. This metric highlights the effectiveness of products in generating sales relative to the number of stores that carry them.

When this formula is applied, it provides a clear picture of how well a product performs across its distribution network. A higher SPPD indicates that a product is generating more sales for each store that offers it, which can inform decisions about inventory, pricing strategies, and promotional efforts.

In contrast, other options do not represent the correct method for calculating SPPD. For example, item price multiplied by distribution weight focuses more on pricing and presence rather than direct sales effectiveness. Similarly, calculating item dollar sales divided by the number of competitors provides insight into market share rather than individual product performance per distribution point. Lastly, using item average sales divided by total store count does not accurately reflect sales efficiency related to distribution points, since it does not take into account how many stores actually stock the item. Thus, option C represents the most accurate