Scenario Planning in CPG

BobD

Hi Everyone, I am compiling a ranking and prioritization of scenario planning use cases in CPG. Feel free to jot down what you are hearing from your customers and within your own CPG companies.

 

Thanks!

JaredDolich

@BobD 

I can't resist the opportunity to weigh in on this question.

Besides What-If modeling, there's a very specific analysis in the CPG industry called the Efficient Frontier for Cost to Serve. It's a scatterplot that has Profit on the Y-Axis and Allocated Costs on the X-Axis. The most efficient, or optimized scenario would be the customers that resides on the boundary of the plots. Here's a visual example from Farhad Malik and here is a link to his brilliant article about portfolio management (plotting risk and reward, instead). Farhad provides the math in his article as well as the Python code if you prefer to run the scenarios outside of Anaplan. The best portfolios are the ones that are close to the black line.

For the CPG example, you would replace the Return with Profit and replace risk with Cost to Serve (Allocated). Of course, the trick is to get the right allocated cost to the customer, but that's a whole different use-case..