Business Challenge: A leading chemical company wanted to develop a proactive price setting and forecasting model for silicone pricing.
Situation
The chemical company was following a price setting method based on supply and demand shifts in the market, which was not robust enough. Hence, they wanted to build a model that could proactively scan market indicators and variables for price forecasting.
Approach
We identified variables affecting market prices and conducted factor analysis to determine factors having high correlation with silicones. The identified factors were used to develop the price equation. We validated the price equation through primary research with buyers and industry experts.
Impact
The client was able to use our price forecasting dashboard to obtain real-time prices and obtain forecast for 12 month period. The model also allowed them to identify key drivers with maximum impact on the prices of Silicone.
