22nd 10:30 am, pi office address

Read these->

demand planning tony arnold

pharma scm
generic drug-petentic otc market,new drug pricing policy, AIOCD,
competitor:abbott
demand planning in pharma, reverse demand, hockeystick syndrome
weekend project- benchmark che formulaes, line fullfil ment, trackiong signal,
forward bias, mape- med difference,
inventory d replenishment plan,MRP,MPS
CTC 11.8= Basic+variable

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Glenmark Carebbean Latam(Latin america)Latin America

The countries of the Western Hemisphere south of the United States, especially
those speaking Spanish, Portuguese, or French.

* The Demand Management Process: it is a process to match demand & supply!

Proactive rather than reactive approach
*Behind the scene, the industry has a sophisticate network that involves patients
(consumers), doctors,
pharmacies, regulation authority, and payers; in specialty drug area, besides the
normal players, there are specialists, special pharmacies, and patient hubs involved,
which makes the network more sophisticate.
* Since the forecast is used to drive the budget, distribution, and production
planning processes, increasing the accuracy of the forecast is fundamental to
improving the stability of these plansi.e.,distribution, inventory, productionand
the overall return on investment from corporate resources
Sensing demand is not easy in pharma
Demand in the pharmaceutical market is a complex combination of push and pull driven demand
and regulatory and pricing pressures. Third parties decide on formularies that influence prescription
behavior, while pharmaceutical companies use lawyers, managed care, detailing, and direct-toconsumer campaigns to influence the FDA, pharmacy benefit providers, doctors and patients to
prolong the patent, promote on formulary, prescribe and request their products.

Unlike some other industries, point-of-sale data is not readily available, which creates a demand
visibility problem. Manufacturers typically purchase data on filled prescriptions and dispensed drugs
from third parties. Prescription data suffers from a time lag it is usually available 10-12 days
following the preceding month. In addition, the data relies on sampling and extrapolation for
locations such as independent pharmacies and clinics.

A company must be knowledgeable about numerous factors that are related to the demand forecast. Some of
these factors are listed next.
Past demand
Lead time of product
Planned advertising or marketing efforts
State of the economy
Planned price discounts
Actions that competitors have taken

The following basic, six-step approach helps an organization perform effective forecasting.
1. Understand the objective of forecasting.
2. Integrate demand planning and forecasting throughout the supply chain.
3. Understand and identify customer segments.
4. Identify the major factors that influence the demand forecast.
5. Determine the appropriate forecasting technique.
6. Establish performance and error measures for the forecast.
Forecast= SYSTIMATIC (Level,trend,seasonlaity) + Randon component
Forecast calculation methos:
Statistical methos-> F=(L+T)*S
Adaptive methods->
o Moving avg-> Only Level, no trend and seasonlity in demand= Systematic component of
demand = level
o Simple exponential smoothning -> Systematic component of demand = level
Lr+l = r:xDt+l + (1 - et)Lr x=smoothning constant
o Trend-Corrected Exponential Smoothing (Holt's Model): Systematic component of demand =
level + trend
L1 = a01 + (1 - a)(L0 + T0 )
T1 = I3(L1 -La)+ (1 - 13)To
o Trend- and Seasonality-Corrected Exponential Smoothing (Winter's Model)
Systematic component of demand= (level+ trend) X seasonal factor
Managers use error analysis to determine whether the current forecasting method is
predicting the systematic component of demand accurately
Forecasting errors
o Error= sum of all errors(F-D)
o Mean squared error= sum(E*E)/n
o Mean absolute deviation MAD= > Absolute deviation=Absolute value
of error
= (1/n) sum(|E|)

MAPE mean absolute percentage error=> avg of error as % of demand

=(1/N)SUM OF {(|E|/D)*100}

BIAS= sum of all errors, fluctuates around 0. Continuously

BIAS>0 means Over-forecasting. Continuously BIAS<0 means
Under-forecasting.
TRACKING SIGNAL= BIAS/MAD
If the TS at any period is outside the range 6, this is a signal that the forecast is biased and is either
underforecasting (TS < -6) or overforecasting (TS > +6). In this case, a firm may decide to choose a new
forecasting method. One instance in which a large negative TS will result is when demand has a growth
trend and the manager is usinga forecasting method such as moving average. Because trend is not
included, the average of historical demand is always lower than future demand. The negative TS detects
that the forecasting method consistently underestimates demand and alerts the manager.
The primary role of cycle inventory is to allow different stages in a supply chain to
purchase product in lot sizes that minimize the sum of the material, ordering, and holding
costs.

Total annual cost ,TC= material cost (Total demand* Cost per item)+ Holding cost (Quantity or Cycle inv
* Holding cost per item)+ ordering cost(no of orders * ordering cost)
= CD
+ (Q/2)*HC + (D/Q)*S
EOQ= under root of (2DS/HC)

Safety inventory is inventory carried to satisfy demand that exceeds the amount forecasted for a
given period. Safety inventory is carried because demand is uncertain and a product shortage may
result if actual demand exceeds the forecast demand
SS is needed to cater Uncertainty in demand during LEAD TIME