Chapter 1 It’s Not Just about Forecasting
The following are the key points in the chapter. Elaborate on each
point in at least 30 words.
- Understanding economics can help you to diagnose the causes of
increases or decreases in sales volumes and costs.
- There are many factors that must be included when considering what
causes the economic values to increase or decrease for a company. The
chapter speaks to the importance of economic forecasting. Using
forecasting as a tool can guide businesses when planning for the future.
Understanding economics will help business managers make savvy decisions
to better run their organization. Knowing how sales volumes and costs
can rise and fall can make of break organizations, but with a solid
economic background, all that can be avoided.*
- Business decisions are about the future and must rely on a view of
the future.
- Decisions have consequences no matter what, good or bad. Making
business decisions based upon future forecasts can determine a companies
success. Understanding the economy and how it will move forward is
important when making decisions. It’s important to use any and all tools
available such as forecasting, quantitative models, and good judgement
to make any business decision.*
- Economics can help you form a more accurate vision of the future,
compared to other common methods of forecasting.
Using economics as a business can help business create a stronger
plan moving forward when making business decisons. using forecasting is
not a bad thing, but economics will allow business to better predict
important decisions such as consumer demand for products and amount of
supply required.*
As a business manager, you should focus more on the broad
magnitudes of changes rather than specific numbers.
Forecast accuracy can and always will be too numerical, but it
doesn’t have to be. Using common adjectives as descriptions of the
economy can give a better understanding to both business manager’s and
consumer’s than numbers that are always confusing. Adjectives will
provide more value and understanding to all parties especially when
basic terminology is all people really need when forecasting GDP
compared to numbers with decimals.*