Reference no: EM133222874

Assignment:

1. Her first approach forecasted demand by looking at the number of overweight individuals in the United States (BMI between 25 and 30) and narrowing down that population to those who were actively trying to lose weight (35%, according to the CSP study). She felt this pool of potential users should again be narrowed to the 15% of those who were comfortable with weight-loss drugs. Printup's experiences taught her that Metabical was likely to capture 10% of those individuals in the first year, and in subsequent years she could expect an additional 5%, up to 30% by the fifth year. In addition, test trials suggested that 60% of the first-time users would repurchase a second supply and 20% of these would finish out the entire Metabical program by repurchasing the remaining supply.

2. Printup also developed a more aggressive forecast using the results from the CSP survey that specifically addressed consumer interest in a prescription weight-loss drug for the overweight. Again, her starting point would be the number of overweight individuals in the United States, but this time she concentrated on the data point that 12% of the respondents were ready to immediately go to their health care provider to request a prescription. She believed the previously developed penetration guidelines (10% increase by 5% per year) and the 60%/20% model for repeat purchases would also apply to this forecast scenario.

3. In the third approach to forecasting, Printup focused on the ideal target consumer: educated females, 35-65 of age with BMIs between 25 and 30. Metabical was expected to capture a higher penetration of this ideal target (4.3 million potential users) than that of the general overweight population. Printup estimated Metabical would capture 30% of the ideal target market in the first year, with a 5% increase in the share each year (up to 50% by year five). She felt the 60%/20% model for repeat purchases would also hold true for this group of users.

How would you go about forecasting the demand? Calculate the forecasted demand for the first five years in units.