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Exercise

Calculating an alternative forecast for Netflix

The original assumptions are as follows: the total amount of subscribers at a 78% success rate results in 39,000 subscribers. We used this to build the forecast numbers.

However, the success rate for 2019 has been recalculated to have a probability of 65%, and the management has asked us to make an adjusted forecast based on this value.

The ratio between the subscribers and sales is 1 subscriber to 0.46 USD sales, set to variable sales_subs_ratio. In addition, the variables for number of subscribers per percentage point (n_subscribers_per_pp) and our prior calculation of forecast1 have also been set.

Instructions 1/2

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  • Set the percentage of successes to 65% (as a whole number, not a fraction).
  • Calculate the new number of subscribers in the dependency as the product of the number of subscribers per percentage point times the percentage of successes.
  • Calculate the new forecast, forecast2, as the new number of subscribers times the sales to subscriptions ratio.