Forecasting

Chapter 6

7E

MANAGERIALECONOMICS

F U N D A M E N T A L S O FF U N D A M E N T A L S O F

© 2003 South-Western/Thomson Learning

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PowerPointPresentation

byCharlieCook

Fundamentals of Managerial Economics 7e © 2003 South-Western/Thomson Learning 6–2

Time-Series Characteristics: Secular Trend and Time-Series Characteristics: Secular Trend and Cyclical Variation in Women’s Clothing SalesCyclical Variation in Women’s Clothing Sales

Figure 6.1aFigure 6.1a

Fundamentals of Managerial Economics 7e © 2003 South-Western/Thomson Learning 6–3

Time-Series Characteristics: Seasonal Pattern Time-Series Characteristics: Seasonal Pattern and Random Fluctuationsand Random Fluctuations

Figure 6.1bFigure 6.1b

Fundamentals of Managerial Economics 7e © 2003 South-Western/Thomson Learning 6–4

Microsoft Corp. Sales Revenue, 1984Microsoft Corp. Sales Revenue, 1984––20012001

Figure 6.2Figure 6.2

Fundamentals of Managerial Economics 7e © 2003 South-Western/Thomson Learning 6–5

Gross Domestic Product, 1959Gross Domestic Product, 1959–Present–Present

Figure 6.3Figure 6.3

Fundamentals of Managerial Economics 7e © 2003 South-Western/Thomson Learning 6–6

Composite Composite Indexes of Indexes of

10 Leading, 10 Leading, Four Four

Coincident, Coincident, and Seven and Seven

Lagging Lagging Indicators Indicators

(1987 + 100)(1987 + 100)

Figure 6.4Figure 6.4Source: The Conference Board Web site at http://www.conference-board.org

Fundamentals of Managerial Economics 7e © 2003 South-Western/Thomson Learning 6–7

The National The National Bureau of Bureau of Economic Economic ResearchResearch

Web Site Is a Web Site Is a Treasure Trove Treasure Trove

of Forecast of Forecast InformationInformation

Figure 6.5Figure 6.5

Fundamentals of Managerial Economics 7e © 2003 South-Western/Thomson Learning 6–8

Resources for Resources for EconomistsEconomists

on the on the Internet Is a Internet Is a

Valuable Valuable Forecasting Forecasting ResourceResource

Figure 6.6Figure 6.6

Fundamentals of Managerial Economics 7e © 2003 South-Western/Thomson Learning 6–9

Barron’sBarron’s Publishes Timely Publishes Timely Information on Information on

Economic Economic IndicatorsIndicators

Figure 6.7Figure 6.7

Fundamentals of Managerial Economics 7e © 2003 South-Western/Thomson Learning 6–10

Nine Nine Common Common Trends in Trends in Economic Economic

Time Time Series Can Series Can

Be Be Forecast Forecast by Using by Using Exponen-Exponen-

tial tial Smoothing Smoothing MethodsMethods

Figure 6.8Figure 6.8

Fundamentals of Managerial Economics 7e © 2003 South-Western/Thomson Learning 6–11

The Appropriate Forecast Technique The Appropriate Forecast Technique Tends Tends

to Vary over the Life Cycle of a Productto Vary over the Life Cycle of a Product

Figure 6.9Figure 6.9

Fundamentals of Managerial Economics 7e © 2003 South-Western/Thomson Learning 6–12

Gross Domestic Product 1966Gross Domestic Product 1966–2000–2000

Figure ST6.1Figure ST6.1

Fundamentals of Managerial Economics 7e © 2003 South-Western/Thomson Learning 6–13

Multiple RegressionMultiple Regression

Figure ST6.2Figure ST6.2