Expected sales

We all have needs, requirements, wants, and expectations. Needs are essential for life, to maintain certain standards, or essential for products and services, to fulfill the purpose for which they have been acquired. Requirements are what we request of others and may encompass our needs but often we don t fully realize what we need until after we have made our request. For example, now that we own a mobile phone we discover we really need hands-free operation when using the phone while driving a vehicle. Hence our requirements at the moment of sale may or may not express all our needs. Our requirements may include wants - what we would like to have but do not need nice to have but not essential. Expectations are implied needs or requirements. They have not been requested because we take them for granted - we regard them to be understood within our particular society as the accepted norm. They may be things to which we are accustomed, based on fashion, style, trends, or previous experience. Hence one expects sales staff to be polite and courteous, electronic products to be safe and reliable, policemen to be honest, etc. 

Expected sales should be used to calculate the weighting of each product in the basket for regulation, rather than observed sales for the year before the fixing of the regulation mechanism. 

The core algorithm assigns the production capacity to the competing products of the same production line, such that the overall expected sales are maximal. If the capacity is critical this basically means that production capacity is designed to the more likely parts of the uncertain demand. If there is plenty of production capacity, safety stock is allocated reflecting the product-specific uncertainty of demand. When looking at all products, usually the situation is between these extremes and the algorithm provides an optimal compromise. 

Forecasted values for markef size and NCE share are then multiplied to arrive at an expected sales trajectory for the compound (expected NCE prescriptions/sales in Figure 35.3). Note that this projection includes three key concepts ... 

The estimates of an NCE s expected sales trajectory can be analyzed using a Monte Carlo technique, which produces a range of possible outcomes, given uncertainty about the actual magnitudes of various input assumptions. The results of a Monte Carlo analysis... 

The Pace for the new compoxmd relates to the speed at which it can reach peak share potential — the shape of the expected sales trajectory. While case and place are generally fimctions of product attributes, disease epidemiology, and other aggregate conditions, the pace for an NCE is more commonly under the influence of various strategic marketing decisions of the part of individual pharmaceutical... 

Case Study Operationalizing Expected Sales Trajectory... 

A pharmaceutical firm is launching an NCE into a disease marketplace of 1,000,000 currently treated patients, and wants to know how many pahents might be captured during a crihcal 3-year launch period. Analogs and an early commercial assessment have indicated that a 20% patient share is possible at 3 years postlaunch — somehow the firm must capture (and keep ) 200,000 patients over the next 3 years. Figure 35.8 depicts the key oper-ahonal question behind such an expected sales trajectory. 

It should be noted that cost-henefit calculations for the same development product may vary considerably between different organizations (see for example Hodder and Riggs, 1991). First, the calculation methods may be different. Second, the assumptions that go into these calculations, e.g. the expected sales of a certain product, may... 

Figure 23.2 Royalties and Milestone Payments for a Lar ge Drug with Expected Sales 1 Billion/Y ear...

The value of the property, including any expected sale proceeds, is significandy less than the cost of its care and handling pending abandonment/destruction, or Abandonment or destruction is required because of health, safety, or security reasons or When the original acquisition cost of the item (estimated if unknown) is less than 500. 

C6 Reference to goals (e.g., .. . with this tactic 1 expect sales to grow. . . )... 

Chrysler specified a modified polymethyl methacrylate (PMMA) laminating resin for the body panels of the high-performance sports car, the 400 bhp 10 cylinder Dodge Viper, which went on sale in January 1992. The transition from styling to production took only three years. The decision to use glass fiber reinforced PMMA resin, molded by resin transfer, was a fundamental departure from established Chrysler practice, where previously all main exterior bodywork had been in sheet metal. However, at expected sales of 3000 a year and a unit price of about 50,000, sheet metal would not have been viable and the annual volume was too low to justify injection or compression molded plastics. 

Both Rhino and Au Bon Pain rely on a fixed supply chain into which they launch new products. The supply chain processes for each product introduction are common, but each new product will have some variation that must be incorporated into the introduction procedure. For Rhino, the promotion budgets and expected sales volume will vary widely from one release to another. Timing is also critical if the release is to take advantage of external events or to a developing market opportunity. For example. Rhino heavily promoted a release of Oscar-winning tracks at Oscar award time. Au Bon Pain can mn a special on a new sandwich to draw customers into their stores. Or it might introduce sandwiches regionally that cater to local preferences. 

In Maccini [101], the author examines the long and short run pricing and inventory decisions where capacity investments can be made. Maccini assumes that expected sales have the following functional form,... 

Vk — c — Ck> Let pa = be the system s utilization regarding only type k customers p = A / p the system s utilization I be average inventory Dk be expected sales rate for customers of type k L Xk — -C fche the expected lost sales rate for customer type k, and B be the expected backorder rate for internet customers. 

An estimation of the expected sales for each product configuration relevant to the wire harnesses. 

Based on the logical representation of the products, the wire harnesses, the costs and the expected sales, the optimization engine computed a set of cost-optimized wire harnesses, i.e. the optimality can be proven mathematically. Because of the... 

Mercury. While mercury lamps used to be the standard in high-intensity discharge lighting, their time has passed. This technology has too many drawbacks low LPW, low CRI, poor lumen maintenance, and a blue light that has questionable appeal. In the next 5 to 10 yr, expect sales of mercury lamps to virtually evaporate. 

Take a good look at Fig. 24. It goes without saying that we expect sales to predict the future in regard to what they will sell. If they only knew that less than 5% of this period is actually spent in value-added work on the products themselves ... 

If it is a new plant, a large number of factors have to be considered, e.g. type of raw materials, their inherent humidity, transport facilities etc. Studies of the market in order to establish expected sales possibilities should be made before selecting the right process. Although this is a major and important subject it will not be treated further in this article, which will focus on the most profitable energy savings in existing plants. 

An example illustrates the potential impact of market mediation cost on supply chain design. We ll use a hypothetical "widget" manufacturer and distributor for our illustration. The widget is a new product, and its product plan embodies management expectations for the first year s sales and profits. Figure 6.2 illustrates the case of the product with expected sales and costs for a "widget" product as shown below ... 

The advantage of this method was its simplicity and flexibility. TLC could reset inventory up or down by just changing the expected sales per week as it accumulated sales history. This didn t remove the need for a forecast, of course, but did assure that inventory levels would track actual demand. 

Capacity usually refers to scheduled annual production output It is logical that procurement costs of a plant depend on production output This connection is explained in Chapter 2, section 2.1.3, Costs . The production output demanded depends, on the other hand, on the expected sales and thus on the market Despite all forecasts and map exercises aimed at making the market more transparent, a decision on plant capacity is an entrepreneurial one with the respective risks being involved. 

After the melt was seeded, any number of variables must be considered in ramping down the temperature of the furnace to crystallize the melt. As mentioned, slower crystallization rates yield larger and more nearly perfect crystals, but if time is excessive no production rate would ever be achieved. A compromise between quality and production must be resolved. This will require estimates of the size of the market to be served, an expected sales price, and capital available for a plant, because slower production rates will require larger, more expensive plants. 

To elaborate the business model, consider a simple case where a company produces and sells a single product entirely in EE. Assume that the per unit cost of manufacturing the product (including procurement of components) and shipping it to the market is c, and unit sales price is p. The company needs to decide how many units to produce and ship (0, given that there is a huge uncertainty in the supply of components (5) and some uncertainty in demand (D). We may capture the supply uncertainty by denoting the actual delivery from suppliers for an order of Q as yg, where y is a random variable between 0 and 1. It is clear that the manufacturer s expected sales will equal the minimum of supply and demand, expressed as Ey Eo Min yQ,D). As the manufacturer only pays for the amount supplied, yg, his expected profit will be p Ey Ep Min yQ,D) — cEy yQ. He will choose order quantity g to maximize his expected profit. Note that the expression for optimal value of the order quantity is independent of the probability distribution functions of D and y, the actual value will be specific to these distributions (Rekik et al. 2010). 

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