What is MacroWeb?

Managerial Decisions Using Forecasting

Forecasting the growth of the a company can be a valuable task managers can perform to see whether they are on below, above, or right on their objectives to meet their year end quota.  The corporation I work for has been growing by leaps and bounds. Recently, they have really pushed managers to increase revenues and go above and beyond their previous year?s sales figures.  This market is very competitive, so it is vital for managers to stay on top of the game.   Recently, the company has made some aggressive moves to become the market leader.  The most recent tactical move was a horizontal merger with the previous market leader.  They are now the largest corporation in their market.  The rapid growth and company awareness has significantly increase sales throughout the chain.  We may experience this first hand when they open another store in our region. 

My objective was to forecast the stores revenues beyond December 2^nd, 2003 and then compare it with the data we will receive after the new store opens.  What I expect is see is one of two outcomes; the new store may increase company awareness causing revenues to increase, or channel conflict will occur and cause revenues to decline.  Using Dr. Tufte's method of forecasting I will be able to compare the current sales trend against the data received after the new store opens.  Depending on the results we can implement several strategies to maximize profit.  For example, if revenues declined we may implement different marketing strategies to increase demand, causing revenues to increase.  For simplicity in this example I will assume we do not incur additional costs when the new store opens.  The additional demand in this case will cause profits to increase. 

Using Dr. Tufte's method of taking logs to see growth rates and forecast numbers into a future period can give managers a better idea of how the company is performing.  This method can give managers a better understanding of how policies, promotions, price changes, or advertising have affected their profits.  This may give the company a competitive advantage over another firm in the industry.  Macro for Business Decisions has prepared me with some valuable tools that will benefit me in making decisions as a leader in a company.