Eduardo Valencia

Why algorithms outperform human forecasters?

Why algorithms outperform human forecasters?

In highly complex and uncertain environments, algorithms are often more accurate than experts. In healthcare, forecasters tend to rely heavily on judgment, despite the inherent bias and inefficiencies. When we evaluate the results of price predictions, demand...

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Cross Elasticity of Demand in Pharma

Cross Elasticity of Demand in Pharma

Cross elasticity of demand (XED) calculates the change in the quantity demanded of a good when the price for another good changes. In the previous post, we saw instances of high levels of elasticity in the pharmaceutical industry. In the real world, however, the...

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Pharma: Calculating Price Elasticity

Pharma: Calculating Price Elasticity

In the pharmaceutical industry, from a price and demand standpoint, all drugs are not created equal. In our daily practice with price elasticity, we find several instances in which drugs show a high level of demand variation whenever there is a change in price. Price...

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Forecast value added: a fat-trimming metric

Forecast value added: a fat-trimming metric

Forecast Value Added (FVA) is a metric that evaluates each participant's performance in the forecasting process. It helps decide which adds value and which doesn't. We should not take for granted that all forecasters (both persons and algorithms) add value to a...

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Demand Forecasting in Healthcare

Demand Forecasting in Healthcare

In the healthcare industry, Artificial Intelligence can dramatically improve the forecasting accuracy of demand estimates. Demand forecasting is an analytics field that attempts to predict customer demand to optimize supply decisions. In the Pharmaceutical industry,...

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AI for healthcare shortages

AI for healthcare shortages

Artificial Intelligence is instrumental in analyzing inventory management trends. It helps predict drug shortages before they happen. In economics, a shortage happens when the demand for a product exceeds the available supply. Drug shortages are becoming increasingly...

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