Forecast Converter 2.4 S

Forecast Converter™

BUSINESS PROBLEM

Companies often produce both annual and monthly forecasts for pharmaceutical products. Annual forecasts are used to look at the long-term view and monthly forecasts are used to look at the short-term.

Sometimes forecasters need to take an approved annual forecast and convert it into a weekly, monthly, or quarterly forecast. This is useful for marketed products to set monthly estimates or targets, as well as for new products that will be launching. The launch forecasts for new products frequently form the basis for manufacturing and sales force planning. Additionally, launch forecasts are important for companies to gauge how well their new products are selling; simply using a ratio of the annual forecast can be inaccurate due to the growth in sales as the launch progresses.

TYPICAL SOLUTION

To convert an annual forecast to a weekly, monthly, or quarterly forecast, analysts frequently “play around” with the numbers until they “look right.” This process is completed properly when the sum of the weekly, monthly, and quarterly values equals the annual numbers and the product adoption rate curve is relatively smooth (it does not rise and then decline) and has no discontinuities (there are no cliffs where sales jump or drop dramatically).

LIMITATIONS TO THE TYPICAL SOLUTION

This process takes time and requires extensive knowledge of the market for each product, and may need to be repeated frequently. This requires the valuable time of employees, who could be doing other important tasks.

OBJECTIVE INSIGHTS' TYPICAL SOLUTION

Objective Insights has designed and developed the Forecast Converter. Forecast Converter automatically takes a daily, weekly, monthly, quarterly, or annual forecast for a given product and converts it into daily, weekly, monthly, quarterly, and annual forecasts. Forecast Converter does this by fitting a reasonable curve to the input data such that it can be split up into days, weeks, months, quarters, and years, while avoiding discontinuities in the curve and still summing to the original input forecast values.

Objective Insights’ Forecast Converter is built in Microsoft Excel and runs completely automatically. Objective Insights customizes the Forecast Converter for your specific application, and provides comprehensive training and indefinite support.

Contact Objective Insights for a fully functional demonstration version of Forecast Converter.

INFORMATION REQUIREMENTS

Required Inputs

• Product name
• Unit of measure (tablets, vials, bottles, packages, etc.)
• Price per unit (e.g., $1.23)
• Forecast start/launch month (e.g., November)
• First year in forecast (e.g., 2004)
• Daily, weekly, monthly, quarterly, or annual forecast
• Number of vial/tablet/package sizes for this product

Optional Inputs

• Pipeline month’s supply target level (e.g., 0.6 months supply)
• Initial pipeline fill override (units)
• Seasonality indices by month (e.g., January = 110%, February = 95%)
• Monte Carlo forecast ranges
• Actual monthly sales to-date

Outputs

• Demand units and revenues by day, week, month, quarter, and year
• Ex-factory shipping units and revenues by day, week, month, quarter, and year and by subproduct (includes pipeline filling)