What-If Scenarios
Explore potential outcomes and use-cases of OptumPricer by altering variables within a given scenario.
Explore potential outcomes and use-cases of OptumPricer by altering variables within a given scenario.
ABC Manufacturing Inc., produces various industrial machinery components used in the automotive industry. They have been experiencing a decline in net profits due to increased labor costs, material costs, and overhead expenses. To address this issue and maintain profitability, they decide to utilize OptumPricer to optimize their pricing strategy.
Currently, ABC Manufacturing Inc. has been facing challenges with maintaining profitability in their product line due to rising costs. Despite having a strong market presence and demand for their products, they are struggling to determine optimal pricing strategies that ensure profitability while remaining competitive in the market.
Data Input: ABC Manufacturing Inc. inputs their prior annualized P&L data into OptumPricer, including information on revenue, cost of goods sold, and companywide costs.
Product Analysis: They use the "Add Product" feature to input details of their Labor, Hybrid and Machine Process products, such as material costs per unit, labor hours, and setup time.
Net Profit Evaluation: OptumPricer generates table output displaying the net profit of each product at its current price. ABC Manufacturing Inc. identifies Test Product 123 and Test Product 135 as being below the price for profitability.
What-If Scenarios: They perform what-if scenarios to optimize product profitability by adjusting prices, material costs, or labor time. For example, they may experiment with reducing material costs by sourcing from alternative suppliers or increasing prices slightly to reflect the value of their products.
Break-Even Analysis: Using OptumPricer's functionality, they analyze the break-even price of each product and evaluate various profit percentages and gross margin projections.
Scenario Saving and Sharing: Once satisfied with the optimized pricing strategy, they can save the revised output as a PDF for internal review and management sharing.
By leveraging OptumPricer, ABC Manufacturing Inc. successfully identifies opportunities to improve product profitability and implement strategic pricing adjustments. They achieve a better understanding of their product line's net profit dynamics and ensure that prices are above the break-even point. As a result, they enhance their overall profitability and maintain a competitive edge in the market while efficiently managing costs and resources.
