Volume forecasting from concept tests
 Volume forecasting predicts take-up of new products/services
 Forecasts are based on likelihood of purchase and value for money
responses to concepts/products, coupled with information concerning
distribution and awareness
 The technique is centred around the classic trial/repeat model, with extra
stages built in to allow comprehensive assessment of sensitivity to
variation in key input parameters
 The trial/repeat model is implemented in the form of a 2-state Markov
Chain
 The sensitivity analysis is conducted via a Monte Carlo simulation,
coupled with resampling to enable accurate determination of statistical
confidence intervals for the forecasts
Volume forecasting from concept tests (cont.)
 Output example, showing minimum, maximum and most likely range
estimates
1400
1315
1200
Estimated Tonnes in Year 1
80% confidence
interval
1000
938
800
767
754
637
600
548
543
444
400
399
358
348
288
260
281
246
207
200
0
Option 1
Option 2
Option 3
Option 4
Option 5
Option 6
Option 7
Note: Volumes for different options cannot be added to yield a total volume of sales
Option 8