The management of the competitive energy company desired a forecasting tool that captured the influence of several factors on financial performance. The management team hoped to use the forecast in their planning and budgeting processes.
Mather developed a forecasting tool that incorporated revenue and costs from monte carlo statistical models to provide estimates of gross margin by quarter for two years. The forecast tool provides confidence intervals around the expected gross margin that reflect the level of hedging adopted by the client. A continuous improvement plan was developed that identified how the reporting tool can be enhanced through analytical, technology, and procedural changes.
The forecast tool was delivered to the client and tested over subsequent quarters. The insights derived from the model supported strategic planning decisions. Improvements to the analytics, technology platform, and reporting outputs were incorporated over time.