A manager needs to develop an early warning system that includes:
Managing through the Business Cycle
| Steps | Description |
|---|---|
| macroeconomic warning signals | The early warning system should include indicators for the overall economy and the relevant industry. |
| end-user information | For example, a bottle manufacturer should watch sales of beer and soft drinks. A fabric manufacturer should watch apparel sales. |
| consumer sales forecast | A company should also monitor its own clients. A manager should break out sales reports by product groups, regions, and customers to trace major surprises in sales. |
| critical cost | The companies that need pay the closest attention to costs are usually manufacturers, utilities, and contractors with with significant exposure to one or two raw materials with typically volatile prices. |
Warnings for a company when the industry or overall economy is starting to decline.
You should always watch how the sales are throughout your industry to learn of upcoming trends or new products to produce.
It is very important to track your own clients, as you can monitor any potential surprises in sales.
Cost is always important to keep track of as companies such as manufacturers, utilities, and contractors have volatile prices of raw materials.
During a recession, the most important managing takes place before and after the actual recession takes place. It is important to be able to look ahead at potential trends in the market, and also to be able to rebound from a recession is extremely important.
Explan each of the following terms in your own words. The author explains the terms in the textbook. If necessary, you may also Google the term on the Web. Good resources include:
Explain the terms in your own words briefly.
Seasonal adjustment is when statistics are adjusted depending on the season to result in a more accurate month-to-month representation of the company.
Describe the characteristics of the following events briefly.