You are on page 1of 18

qwertyuiopasdfghjklzxcvbnmqwertyui opasdfghjklzxcvbnmqwertyuiopasdfgh jklzxcvbnmqwertyuiopasdfghjklzxcvb nmqwertyuiopasdfghjklzxcvbnmqwer [Type the document title] tyuiopasdfghjklzxcvbnmqwertyuiopas [Type the document subtitle] dfghjklzxcvbnmqwertyuiopasdfghjklzx cvbnmqwertyuiopasdfghjklzxcvbnmq

wertyuiopasdfghjklzxcvbnmqwertyuio pasdfghjklzxcvbnmqwertyuiopasdfghj klzxcvbnmqwertyuiopasdfghjklzxcvbn mqwertyuiopasdfghjklzxcvbnmqwerty uiopasdfghjklzxcvbnmqwertyuiopasdf ghjklzxcvbnmqwertyuiopasdfghjklzxc vbnmqwertyuiopasdfghjklzxcvbnmrty uiopasdfghjklzxcvbnmqwertyuiopasdf ghjklzxcvbnmqwertyuiopasdfghjklzxc


[Pick the date] waseem akram

Contents

ACKNOWLEDGMENT

We have no words to express our deepest gratitude to Almighty, Compassionate, and Supreme ALLAH, who enable us to accomplish this task. We also invoke peace for HAZRAT MUHAMMAD (S.A.W), the LAST PROPHET OF ALLAH, who is forever a torch of guidance for humanity as a whole. We express our gratitude to our teacher whose teachings have brought us to this stage of academic zenith and very much thankful for his vigilant supervision, intellectual guidance and very kind attitude. This is our final project of Managerial economics and we are very happy that we have completed it in a beautiful manner. It was a very productive practice for our future career as it helps us to make managerial decisions while keeping the facts and figures in mind.

Dedication

We would like to dedicate this project to our Most Respectful Teacher Prof. Ilyas sahib, our Beloved Family, friends and colleagues. Who motivated us on every step of our life and everybody who helps us out to full fill this project.

Introduction
Purpose of our research is to make decision and forecast the company next sales quantity of product which we have selected for our report. After this we are able to estimate the product sales quantity in future. This report helps us and pharmaceuticals company in order to estimate the sales quantity of their similar product that how much quantity they should have to produce in order to meet the demand of their customers. And it also helps us application of our academic knowledge in real world. In order to gain our aim we will use different techniques of estimation to understand the data and product demand in real market. We have selected the toothpaste (Lasogen) of Himont pharmaceutical company.

History of Himont pharmaceutical company


Himont was established in 1994 by group of professionals mostly returning from USA after completing their education and several years of experience with multinationals, i.e. Glaxo, Upjohn, Novartis, Aventis, Servier and Rhone Poulenc. The chairman of the group, Dr. M. Umar is a leading orthopedic Surgeon Professor at a prestigious national university, the Agha Khan Medical Institution. Himont is not owned by a single family, it is being created as an institution. The President & CEO Mr. Intesar Siddiqui, was educated at Columbia University New York worked with Upjohn Company for over twentytwo years both at domestic and international operations, including the USA. The last position he held with UpJohn as a regional Director for the South Asia . The primary objective of the group was to establish high quality branded generics company, represent multinationals not operating directly in Pakistan and to establish a FDA and European specifications bulk drug plant. In last twelve years, Himont has moved forward considerably and has established two manufacturing facilities. Himont Chemical built one of the largest bulk raw materials manufacturing plants in the country, which had seven hundred tons annual capacity. it was established at a site of 12 acres to produce USP/ BP standards Ibuprofen, Sulphamethoxazole, Ciprofloxacian, Ampicillian, and Cloxacillin. The plant raw materials to one hundred and twenty companies including multinationals like Glaxo / Welcome, Knoll, Roche, Organon, Reckitt & Colman, Rhone Poulenc and several other local companies. Later it was sold to another company. In 2007 Himont has built another unique boutique plant to manufacture bulk chemicals for both Cardiovascular and Iron Complex nutritional compounds. It meets all the international GMP standards. We are confident to export raw material to multinationals in Europe as well as in other regions. The second plant is manufacturing / repacking non-sterile and sterile products. Currently, Himont Pharmaceuticals (PVT.) Limited is manufacturing eighty different formulations. These products include under license arrangements with leading European companies, i.e. Italfarmaco and Thea from France, Himalaya Drug co. (herbal products) of USA Standard Chem. & Pharm.

From Taiwan lacer from Spain and Denofa from Norway. Currently Himont Pharma is marketing manufacturing and distributing products of ten multinational companies in addition to several of its own formulations. Himont has established its own distribution company with nine centers in major cities, and directly supply products to over thirty thousand pharmacies throughout the country. In the local market, Himont is considered as a fast growing company with excellent quality image. According to the latest edition of IMS, Himont is rated among top thirty companies out of 550 pharmaceutical companies operating in Pakistan; and the combine business of all the divisions is the third largest among the National Pharmaceutical Companies. According to IMS audits, more than sixty percent of the local physicians, at least once a week prescribe Himont Pharmaceuticals products, particularly in the teaching institutions. If one includes raw material purchased from Himont Chemicals, more than 80% physician prescriptions in Pakistan contain Himont products. The company has strength of over eight hundred and fifty employees, including qualified professionals from various fields of expertise. The company maintains its own separate Human Resource Development Center, since its management believes that its employees are its biggest assets. As part of its governance policy the management is committed towards the continuous education of personals and has established its own Human Resource Department Center. The company has also established a state of art laboratory to ensure quality control and quality products.

About Himont pharmaceutical (pvt) ltd.


Himont has established itself among the medical community as a responsible and professional partner with quality products and services within short span of twelve years Himont has established itself as market leaders in some formulations causing other companies to test their quality against Himont products.

Vision 2015:
y y y y y

US FDA Specifications plant and acquisition of European standard technology. Basic clinical research and creation of product development center. Creation of Biotechnology Center. Marketing of FMCG (Fast Moving Consumer Goods). Consistently developing and marketing International Quality Products.

Management Philosophy:
y

People are to be treated with respect and dignity. We believe in dealing honorably and fairly with our employees at all times.

People are individuals and have a right to be different. We must expect and respect these differences and allow the opportunity to achieve their personal goals while achieving company goals. Culture of Delegation and Trust.

Himont Manufacturing:
y y y y y y y y y y y Tablets (Coated, Chewable, Dispersible and Effervescent) Capsules Syrups, Suspensions Inject able (Liquid and Powder) Ophthalmology Sterile Tooth Paste Mouth Washes Bio Adhesive Gel Ointments Hormonal Product Basic Raw Material

Quality Assurance:
y y y Quality is not just reflected in Himont products, but it is the state of mind of each employee, and the systems that are being followed each day. Each Himont employee takes pride in the company products and services, and the way each employee is treated within the organization. The management considers human resource its biggest asset; and therefore there is continuous investment in their development.

International collaborations

Himalaya 2000
U.S.A

Sun Shine
China

Hissen
China

Himont achievements in last twelve years of operations.


1. The board and the management have created a vision which has become a guideline for the team. 2. Established a team of professionals, who are committed and motivated by the company vision. 3. Strong equity base without long term financial liabilities. 4. Established a profitable business whose foundations are laid on ethics and professionalism. 5. Established systems which are independent and progressive. 6. Established a human resource development center. 7. A culture of investment in human resource development. 8. Strong Customer base. More than 60% physicians prescribe Himont Products once in a week. 9. Established two manufacturing plants (pharmaceuticals, health care products and chemicals). 10. Established its own distribution company. 11. Established collaboration with a dozen multinational companies. 12. Successfully launched nearly six dozen products and demonstrated persistent growth. 13. Strong relations with Ministry of Health and the Medical Community. 14. Viewed as reliable and trusted partners by financial institutions.

Product
The product which we have selected for our report is a product of Himont pharmaceutical laboratories tooth paste named LASOGEN. This is a FMCG product which is being used in our daily life.

Demand Forecasting
Demand forecasting is used to estimate the demand of a specific product. We used different techniques while forecasting the demand of a product and after using these techniques we able to estimate the demand of a product that how much the quantity of a product will be demanded in future. While forecasting the demand we cannot forecast the actual demand but we reach approximately close to the demand of a product we cannot estimate the actual quantity of that product but we nearly estimate it 90% to 95 % may be more accurate. When we come to know this estimation we can easily make decisions about the demand that how much it will be demanded in future. It will be more convenient and rational estimation in order to estimate the demand without any prediction. There are two types of forecasting. 1) Qualitative methods. 2) Quantitative methods.

Qualitative methods:
In this type of forecasting we used following techniques while estimation the future demand. 1) Surveys. 2) Opinion polls. a. Delphi method 3) Soliciting a foreign perspective.

Quantitative method:
In the quantitative method time series comes and then further components of time series are as follows. 1) Secular trend. a. (Time series analysis). 2) Seasonal variations. a. (Ratio to trend). b. (Dummy variable). 3) Cyclical fluctuation. a. (Barometric technique). 4) Random disturbances. a. (Smoothing technique). b. (Exponential / Moving average technique).

Secular Trend:
Secular trend shows the straight line because in this estimation the estimated values increased continuously as the time passed. In this we used time series analysis in order to estimate the future sales or demand of the product. Secular trend can be explained as: Secular trend refers to a long run increase or decrease in the data series (the straight solid line in the top panel of figure 1) For example: Many times series or sales exhibit rising trends over the years because of population growth and increasing per capita expenditures. Some such as type writers, follow a declining trend as more and more consumers switched to personal computers.

Seasonal Variation:
Some time we are estimating the future value of that product which are seasonal products in nature in seasons there demand goes at the peak and in non-season they are demanded very less as compare to their seasonal sales or demand. In this we used to methods to estimate the sales or quantity, first is ratio to trend method and second is dummy variable. We can explain the seasonal variation as:

Refers to the regularly recovering fluctuation in economic activity during each year (The heavy dashed curved blue line in the bottom panel of figure 1) the cause of weather and social customs. Thus, housing starts used to be much more numerous in spring and summer then in autumn and winter (because of weather conditions),while retail sales are greatest during the last quarter of each year(because of the holidays).

Cyclical Fluctuation:
Cyclical fluctuation are measured by barometric method y y y y y y y National Bureau of Economic Research Department of Commerce Leading Indicators Lagging Indicators Coincident Indicators Composite Index Diffusion Index

Cyclical fluctuations are the major expansions and contractions in most economic time and series that seem to recur every several years (They heavy dashed curve line in the top panel in figure 1). For example, the housing construction industry follows long cyclical swings lasting fifteen to twenty years, while the automobile industry seems to follow much shorter cycles.

Random Disturbances:
These are the random variations we cannot estimate more than one quarter in this kind of data. The values that are not predictable are called random. This is measured by two methods 1) Smoothing technique 2) Exponential / Moving average In can be explained as: Are the variations in the data series resulting from wars, natural disasters, strikes, or other unique events. (These are shown by the solid line segments in the bottom panel of figure 1).

Figure 1

Comparison , Advantages and disadvantages of techniques:


In secular trend we can just estimate the trend of the value and is limited and gives result in increasing values. As time passed the estimation in secular trend goes increases. And we cannot estimate the variation of season in this method. In order to measure the seasonal variation we have to use the ratio to trend method. And from it we cannot estimate the random variation data and cyclical fluctuated data. Above given different techniques are used in different cases. As some of them have some advantages and also disadvantages while application of them. In

Collection of data
We have taken the data of Himont pharmaceutical companys product lasogen data in quantity. Which are available for us in quarterly based. Data of the lasogen product is:

Years 2004

2005

2006

2007

Time Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Quantity 53707 80170 83602 61855 58401 78503 80206 64427 70460 80710 78322 76610 79935 77914

Years

2008

2009

2010

Time Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Quantity 87379 67833 66114 85476 89868 71541 76301 97519 92471 81639 90152 113539 141137 48870

Secular Trend and Seasonal Variation:

Years
2004

Time Quantity
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 53707 80170 83602 61855 58401 78503 80206 64427 70460 80710 78322 76610 79935 77914 87379 67833 66114 85476 89868 71541 76301 97519 92471 81639 90152 113539 141137 48870 2234661

T
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 406 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143 79809.32143

(T- )
-13.5 -12.5 -11.5 -10.5 -9.5 -8.5 -7.5 -6.5 -5.5 -4.5 -3.5 -2.5 -1.5 -0.5 0.5 1.5 2.5 3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5 11.5 12.5 13.5

(Q- )
-26102.32143 360.6785714 3792.678571 -17954.32143 -21408.32143 -1306.321429 396.6785714 -15382.32143 -9349.321429 900.6785714 -1487.321429 -3199.321429 125.6785714 -1895.321429 7569.678571 -11976.32143 -13695.32143 5666.678571 10058.67857 -8268.321429 -3508.321429 17709.67857 12661.67857 1829.678571 10342.67857 33729.67857 61327.67857 -30939.32143

(T- )2
182.25 156.25 132.25 110.25 90.25 72.25 56.25 42.25 30.25 20.25 12.25 6.25 2.25 0.25 0.25 2.25 6.25 12.25 20.25 30.25 42.25 56.25 72.25 90.25 110.25 132.25 156.25 182.25

(T- )(Q- )
352381.3393 -4508.482143 -43615.80357 188520.375 203379.0536 11103.73214 -2975.089286 99985.08929 51421.26786 -4053.053571 5205.625 7998.303571 -188.5178571 947.6607143 3784.839286 -17964.48214 -34238.30357 19833.375 45264.05357 -45475.76786 -22804.08929 132822.5893 107624.2679 17381.94643 108598.125 387891.3036 766595.9821 -417680.8393 65642.56404 66691.95348 67741.34291 68790.73235 69840.12178 70889.51122 71938.90066 72988.29009 74037.67953 75087.06897 76136.4584 77185.84784 78235.23727 79284.62671 80334.01615 81383.40558 82432.79502 83482.18446 84531.57389 85580.96333 86630.35276 87679.7422 88729.13164 89778.52107 90827.91051 91877.29995 92926.68938 93976.07882 95025.46825 96074.85769 97124.24713 98173.63656

Q/
1.215816637 1.196685916 1.178147908 1.160175487 1.14274316 1.125826939 1.10940424 1.093453776 1.077955467 1.062890356 1.048240529 1.033989049 1.020119887 1.006617862 0.993468586 0.980658414 0.968174395 0.95600423 0.944136229 0.932559279 0.921262801 0.910236725 0.899471458 0.888957854 0.87868719 0.868651141 0.85884176 0.849251452

2005

2006

2007

2008

2009

2010

2011

1827

1917234.5

Q/
1.215816637 1.14274316 1.077955467 1.020119887 0.968174395 0.921262801 0.87868719 1.196685916 1.125826939 1.062890356 1.006617862 0.95600423 0.910236725 0.868651141 1.178147908 1.10940424 1.048240529 0.993468586 0.944136229 0.899471458 0.85884176 1.160175487 1.093453776 1.033989049 0.980658414 0.932559279 0.888957854 0.849251452 -

Average

Quantity WRT
Seasonal Variation

1.032108505

1.018130453

1.004530101

0.991292187

98076.59399 97816.73835 97564.22982 97318.75893

Dummy VariableRandom disturbances

Smoothing technique
Years Quarters 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Quantity(Q) Three quarters moving average(F) 53707 80170 83602 61855 58401 78503 80206 64427 70460 80710 78322 76610 79935 77914 87379 67833 66114 85476 89868 71541 76301 97519 92471 81639 90152 113539 141137 48870 2234661 72493 75209 67952.66667 66253 72370 74378.66667 71697.66667 71865.66667 76497.33333 78547.33333 78289 78153 81742.66667 77708.66667 73775.33333 73141 80486 82295 79236.66667 81787 88763.66667 90543 88087.33333 95110 114942.6667 101182 -10638 -16808 10550.33 13953 -7943 -3918.67 9012.333 6456.333 112.6667 1387.667 -375 9226 -13909.7 -11594.7 11700.67 16727 -8945 -5994 18282.33 10684 -7124.67 -391 25451.67 46027 -66072.7 113167044 282508864 111309533.4 194686209 63091249 15355948.44 81222152.11 41684240.11 12693.77778 1925618.778 140625 85119076 193478826.8 134436295.1 136905600.4 279792529 80013025 35928036 334243712.1 114147856 50760875.11 152881 647787336.1 2118484729 4365597280 9481952236 (Q-F) (Q-F)2

2004

Root Mean Square Eror W=0.4 =

2005

2006

RMSE =

2007

2008

2009

2010 2011

Exponential Technique
Years Quarters Quantity(Q)
2004 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 Q19 Q20 Q21 Q22 Q23 Q24 Q25 Q26 Q27 Q28 Q29 53707 80170 83602 61855 58401 78503 80206 64427 70460 80710 78322 76610 79935 77914 87379 67833 66114 85476 89868 71541 76301 97519 92471 81639 90152 113539 141137 48870 2234661

Ftw=0.4
53708 53707.6 64292.56 72016.34 67951.8 64131.48 69880.09 74010.45 70177.07 70290.24 74458.15 76003.69 76246.21 77721.73 77798.64 81630.78 76111.67 72112.6 77457.96 82421.98 78069.59 77362.15 85424.89 88243.33 85601.6 87421.76 97868.66 115176 88653.6

Ew=0.4
-1 26462.4 19309.44 -10161.3 -9550.8 14371.52 10325.91 -9583.45 282.9281 10419.76 3863.854 606.3125 3688.787 192.2725 9580.363 -13797.8 -9997.67 13363.4 12410.04 -10881 -1768.59 20156.85 7046.109 -6604.33 4550.399 26117.24 43268.34 -66306 -88653.6

E2W=0.4
1 700258613.8 372854473.1 103252749.3 91217811.2 206540559.5 106624446.7 91842574.19 80048.31692 108571333.2 14929368.66 367614.8141 13607153.1 36968.71043 91783364.68 190378785.5 99953388.28 178580419.9 154009070.7 118395650.3 3127896.159 406298539.3 49647653.01 43617234.97 20706133.47 682110202.2 1872149570 4396484808 7859460129 17976886561

2005

2006

Root Mean Square Eror W=0.4 =

2007

RMSE =

2008

2009

2010

2011

Analysis Conclusion Recommendations