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.
  • Understanding economics helps you diagnose why an increase or decrease in sales volume and costs. Sometimes growth has just slowed up across the country in your market and there’s nothing that you did wrong or can-do right o fix it. Sometimes it can be due to competitive pricing or other variables which would result in a needed chance. Forecasting the economy can help to budget certain things inside a company and understanding how the economy changes can help companies understand their business better.
• Business decisions are about the future and must rely on a view of the future.
  • Business decisions are always made regarding the future, not the past or present but the future. This is true for decisions on what products to produce or continue to produce, the pricing of their product or services, etc. As a company thinking about the future keeps your business afloat and innovative and ahead of the game which is very important in today’s world where every market has heavy competition.
• Economics can help you form a more accurate vision of the future, compared to other common methods of forecasting.
  • Economics helps to anticipate changes in trends that marketing people can’t see. Marketing people are really could at finding the current trends, but economists are good at predicting the future trends. Looking into the future creates good decisions. These decisions can be changing their prices, producing more products or drawing back, or changing how they go about their business to help avoid losses.
• As a business manager, you should focus more on the broad magnitudes of changes rather than specific numbers.
  • Focusing on the magnitude of changes rather than specific numbers is a far better way to predict your success. The book discusses using adjectives such as strong, moderate, weak, or very weak rather than predicting a 3.5 % increase. These adjectives give more value for the business and those in the business than the numerical numbers.