Question:

1. Should Torres override the statistical models and increase the forecasts?

Information:

-Alan Torres, vice president Procter and gamble. Looking at the graphs in the business sphere room at p&g headquarters in Ohio. Just introduced a compacted, powder laundry detergent and the results were better than expected. -Group president and CIO (Chief Information Officer) formulated an up-to-date system to help decision making for the company. Once the results were available Torres, VP and his team made the necessary changes. -Over time and with this tool, there was a 3% increase in detergent where compacted detergents were. VP expected an increase of 8.5 b to N. American laundry detergent market, where growth rarely passed 2%. Had gone up 2% from 2009 to 2010. Powder detergent increased 12% while tide, gain, and cheer, gained market share. P&G had more than 50% of the share in North America- made $4b in 2010. -Compacted detergents were going to introduced to the rest of North America & they were optimistic. But they did not take in to account the market disruption caused by the intro of compacted detergents and still showed growth of 1% in 2011

Preparations for wave 2 were in order. Torres congratulated his team on the success of wave 1. IDS forecast for wave 1 was achieving 1% annual growth -The sudden change of compaction could not be ignored. Torres didn't now if he should override the statistical forecasting or not. -The change in forecast had a bigger change to the north america fabric care annual plan. The forecast was available through the decision cockpit. Every 1 increase in powder sales improved P&G revenue by over half a million dollars per month. 10% increase would have $65million in annual top gains -To have a 1% increase, plants would have to make an extra 35,000 boxes containing 275,000 pounds of compacted detergent per month. If compaction led to a big market growth and share gains, P&G should increase the north america roll-out.