Week 2: Best Practices 1

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.
  • Businomics is able to provide different tools that we would need to use to understand different ranges of economic interactions. It is not necessary to start a price war if there is a general slow down in the market. Sometimes it would be smarter to sit back and watch the situation with how it would play out. However, sometimes economics is able to show if we are or are not doing our jobs well. For example, if there is a market growing on sales that is with similar products but our competitors are growing then through economics you can pin point that someone is not doing their job to keep up with the competition or stay ahead.
• Business decisions are about the future and must rely on a view of the future.
  • When making decisions in business you are never making a decision about the past. You have to draw up a clear vision on how the market might benefit or not benefit with how things are going currently and how you can pivot to make the most effective decision to keep productivity at its finest.
• Economics can help you form a more accurate vision of the future, compared to other common methods of forecasting.
  • Economics is definitely one of the more accurate ways to predict visions of the future because you have hard data to make predictions from from previous quotas, and from current ones too. You can also pull data from competitors to see where your company stacks in the market. All of these methods allow you as a business figure out ways to thrive in the future.
• As a business manager, you should focus more on the broad magnitudes of changes rather than specific numbers.
  • As a business manager it definitely is smarter to look at a broad magnitude of changes over specific numbers because supply and demand can change with new advances in technology. Sticking with specific numbers does not attribute to potential changes in the market over years and could result in a large deficit financially. Obviously you will never be 100% accurate, but keeping a broad perspective will bring you closer to accuracy than strictly following a set of numbers in the present moment.