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.
- As a decision maker, you want to be confident in your decisions.
Knowledge about economics can help prevent mistaken interpretation of
sales data. Economics helps you to understand and consider the risk of
cost increases before making any final decisions/commitments.*
- Business decisions are about the future and must rely on a view of
the future.
- When it comes to making a decision, you’re making a decision for the
future. Before decisions are made for the future, you plan for the
outcome. If you do not dedicate time to future thinking, it could lead
to failure as a business.
- Economics can help you form a more accurate vision of the future,
compared to other common methods of forecasting.
- *Although demand is hard to forecast, economists are able to
anticipate changes and form a more accurate representation. Economics
can make future business decisions easier by enhancing a business’s
vision.
- As a business manager, you should focus more on the broad magnitudes
of changes rather than specific numbers.
- Providing forecasts in adjectives rather than specific numbers
provides more value to businesses. As a business leader, it is important
to know that economic growth will shift between a couple adjectives
rather than numbers.