Pink Future Sales Simulator
Pink Future PLC · Sales planning

How many injectoplactors will we sell next year?

Injectoplactors are small devices that emit happiness when tickled. We know two years of monthly sales. We don't know next year's growth, so we simulate many possible sales paths and combine them into one forecast.

growth in history ΔY(T) = Y(T) / Y(T−1) − 1 one path Gi(T) = Gi(T−1) + Gi(T−1)·W(μ,σ) start Gi(1) = last known sales forecast F(T) = Σ Gi(T) / n

1What history tells us about growth

Each bar counts past months with that growth rate ΔY. From them we read the typical growth μ (median) and how much it varies σ.

Past months Shape of W we simulate
From history: μ (median)
–
From history: σ (deviation)
–

2Choose the shape of W

3Simulate n possible sales paths, then combine them

Bands
Actual sales Y(T) Simulated paths Gi(T) Average F(T) 70% of paths 90% 95%

Where the paths end

Compare shapes of W (final month)

Shape of WnAverageMedian90% range

Run each shape once to fill the table. Changing the history, μ, σ or months ahead clears it.

Paths simulated (n)–
Forecast F(T)–units in the final month, average of all paths
Median path–half the paths end above, half below
Ranges for the final month
70%–90%–95%–
Chance sales fall below today–today = – units

What to try

  1. Press n = 1 several times. One path is one possible future, and each press gives a different one.
  2. Go through 10, 100, 1,000, 10,000. Watch the forecast F(T) change less and less.
  3. Switch between Average and Median. Why does the average end a little higher?
  4. Run all six shapes of W with n = 10,000 and compare them in the table. Which shapes change the 95% range most?
  5. Switch to the Volatile history. What happens to the bands and to the chance of falling below today?
  6. Switch to the Seasonal history and press n = 1. Do the simulated paths have seasons? What does this model miss?