Choose from the words in the box to complete the sentences. The first has been done for you.
| net sales | market overheads | loss expenditure | cash-flow gross | capital profit |
| 1. | The forecast which predicts how much money will be gained by a business is called the profit forecast. |
| 2. | The forecast which predicts how much money will be lost by a business is called the __________ forecast. |
| 3. | The forecast which predicts how much money will be received or spent by a business is the __________ forecast. |
| 4. | The forecast which predicts where most sales will be made, and what their value will be, is the __________ forecast. |
| 5. | The forecast which predicts how much the company will sell is the __________ forecast. |
| 6. | The forecast which predicts how much money will be spent by the company is the forecast of __________ . |
| 7. | The forecast which predicts how much money is needed to start up a business or to increase its wealth is the __________ forecast. |
| 8. | The forecast which predicts how much money the company will earn before tax is paid is the __________ profit forecast. |
| 9. | The forecast which predicts how much money the company will earn after tax is paid is the __________ profit forecast. |
| 10. | The forecast which predicts how much money the company will have to spend on salaries, heating and lighting, rent, etc., is the forecast of __________ . |
IV. Speaking Practice
Read the beginning of the following dialogue and proceed on your own using the key words as props: supply, demand, forecast methods, risks, costs.
David Hook is in Minsk, Belarus. He wants to set up a new branch of Whitegate Computer Services in Minsk. He is at business meeting now. A Belarussian business associate Igor Savich asks him a few questions.
| I. Savich: | So, Mr. Hook, tell us exactly what products you want to sell here. |
| D. Hook: | Well, we want to sell not only our computers with our software programmes but we also want to sell our services. We have the technology and know-how to help any business create software programmes that specifically fit their needs. If they need an accounting programme or a supply or demand forecast programme we can help. |
| I.: | O, I see. Can you dwell on this programme a bit now? |
| D.: | Well, supply is an amount or quantity of the product that you have in stock. Demand is the quantity of your product that consumers will buy. A supply and demand forecast programme would help you analyse the existing market and current trends in the market. It would then give you a prediction as to how large the demand for your product will be and subsequently how large your supply will have to be. |
| I.: | Ok. Thank you. It is very clear now. I have another question then. |
Comment on the following.
A manager is overheard saying, “Plan? I never have time to plan. I live from day to day just trying to survive”.
Several companies are experimenting with programs that shift most of the responsibility for planning to the lower levels of the organizations. Discuss possible advantages and disadvantages to be realized from such programs.
The U.S. Hispanic population has recently been increasing at four times the rate of the overall population growth. As a bottler of sugared colas, you know that the Hispanic market consumes 65 percent more colas per capita than general population. How would this information be useful to you in determining the market potential for soft drinks? Would it affect your decision to use either time series or multiple methods in your sales forecast? Why?
In an industry sales forecast is needed for each of the following products, for which product will a time-series approach be the most appropriate?
a) Automobiles
b) Laundry detergent
c) Baby food
Extend your answer to the volume of independent monologue utterance.
Experiential Exercises.
The Importance of the Planning Function
Purpose
The purpose of this exercise, which requires some out-of-class homework to prepare the answers, is to emphasize the importance of planning in organizations in various industries.
The Exercise in Class
1. Every person in the class should be assigned the same organization from the following list and answer these questions:
| a) | What events in the organization’s environment should be considered in developing a strategic plan for the successful achievement of objectives? |
| b) | How likely are important events to occur? That is, what is the probability of an event (e.g., energy shortage, shortage of qualified job candidates, increase or decrease in demand, increase or decrease in competition)? |
| c) | How can managerial planning improve the organization’s chances of surviving the occurrence of positive and/or negative events cited in your answer to b)? |
The organizations for the exercise:
| General Motors Corporation | Taco Tico, Inc. | Wells Fargo & Co. |
| Standard Brands Paint Company | Pacific Stereo | Revlon, Inc. |
| Walt Disney Company | Levi Strauss & Co. | Honeywell, Inc. |
| General Mills, Inc. | Sears, Roebuck & Co. | Volvo North America Corporation |