Detailed simulation for pricing system re-design

Objective

A medical supplier wanted to redesign its pricing system and required a simulation tool in order to

• Simulate the impact of the new pricing system on 2 million annual sales data points
• Enable multiple changes and adjustments to the simulated pricing system
• Assess the effect of 10 different rebates/discounts with different parameter sets
• Provide detailed analyses of the likely outcome of the proposed pricing system.

Technical solution

• Excel front-end with central Access database, allowing multiple users to edit and analyse scenarios
• Professional UI, using Ribbons
• Interactive waterfall chart and result breakdown
• Fast high-level simulation in real time, for rapid "top down" analysis cycles
• Detailed simulation in 1-2 minutes, for comprehensive "bottom up" analyses
• Automatic import of latest sales data from enterprise sales database

Result

• Reduction of pricing system redesign effort from 6 months to 4 weeks, enabled by interactive simulation and facilitated in workshops with key stakeholders
• Simulation tool enabled iterative approach, allowing for detailed fine-tuning in very short cycles
• Flexible result analyses allowed for application in top management meetings (for overall impact assessment) down to product-/customer-/sales rep level or any combination thereof
• Tool is now used for regular annual pricing system adjustment