Forecast use to be a key activity on traditional supply chain activities. Besides the deep knowledge available about forecasting and the broad range of forecast techniques, I like to comment some remarks we use to hear about forecast.

Forecasts are usually wrong

I understand this is to emphasize we have to be careful on how to interpret predictions. If we take the exact forecasted figure it use to be wrong, most of the time they are not exact. Furthermore, sometimes even a forecasted trend fails. But to be wrong it doesn’t mean to be useless. For instance, the Newton theory of gravity is wrong compared with the relativistic one, but for some purposes Newton theory is useful, is “true enough”. Even relativistic is not “fully true”. In the same way we have to know how to use data forecast, the domain of validity, the assumptions made, the uncertainty consider … forecast is not a crystal ball but is a powerful tool. This is the sense we have to understand the said “forecasts are usually wrong”.

A good forecast is more than a single number

When we speak about the status of a project or we ask about a technology with some top manager, most of them self manmade owners of a fair big company, they use to ask me for a single word, god or bad, yes or no, sold or not, etc. Their mind in that case is dichotomic because the underlay question is to go ahead or not with a given action (adopt that technology or not, send the invoice or not, fire an executive or not). Human mind like a single element, a single word, a single concept, a single figure to define a situation, and prediction process is immerse on the same phenomena, we like to define future status with a single word or a single figure. But in the same way real life is not a single number, the forecast of a real live fact will not be a single number. Life is also dynamic.

A good forecast has to integrate the assumptions made to perform the forecast and has to integrate the evolution along the time of the forecasted factor.

Aggregate forecasts are more accurate

Usually a fact use to be a summation of facts. Each one with a different contribution grade to the final fact. This is a fact use to be a weighted summation of factors. When we made a forecast, we are, directly  or indirectly, forecasting individually those factors, and to do this we are assuming certain conditions for each factor. If a given assumption fail in a given degree, the forecasted factor will fail accordingly. All the assumptions are not going to be wrong at the same time and the higher the number of factors we can integrate to forecast a fact, the lower the likelihood all of them fails simultaneously and therefore the forecast will be more robust.

The former paragraph has been a verbal explanation of the well known at statistics theory of the “central limit theorem” that states the conditions under which the mean of a sufficiently large number of independent random variables, each with finite mean and variance, will be approximately normally distributed.

The longer the horizon, the less accurate the forecast

Forecast is at the end an extrapolation mathematical computation, this means the far from the known data the worst prediction. Also, if we forecast with a single number, because of the dynamic nature of life, most probably will fail because the assumptions will change. The nature of the forecasted phenomena has strong influence, for instance, we can forecast the average distance between the earth and the sun for the next one thousand years accurately even with a single number. But the weather forecast for next month is really difficult if not impossible.

We can make the same remark when forecasted estimation is based on linear regression, but when higher order functions like quadratic or exponential functions comes into play, time influence increase dramatically and a fail on the selection of the coefficients could produce very big mistakes at the longer time period.

Past + key information = better forecast

What is a forecast? A description of a future situation. If the situation is static, it will be determined by the knowledge of relevant to the case (key) factors and their influence and if the future situation is dynamic, the change will be a composition of a trend, a seasonality (or periodicity) and novelties. Trend and seasonality could be observed in the past so weighted “in the right way” could contribute to improve forecast. But sometimes …

Dear Ones,

Yes, we are teasing you a bit for did your heart not drop  when you read that title? “Oh dear – this is the weekend I am going to be with family and friends and it’s going to be terrible.”  Nothing could be further from the truth.

There will be energy surges throughout this Thanksgiving weekend and the result will probably be some erratic behavior. Now you are thinking, “So what else is new?” And we laugh along with you for that statement is true on so many levels.

The behavior we are discussing is the potential for extremely rapid shifts in your feelings from great love to anger to resignation. You may be crying one moment about how much you love everyone, and the next sharply telling everyone to put on their coats so you all can go shopping. Your feelings, and therefore your behavior, will be a bit like the yo-yo you used to play with as a child.

Many of you fear that such erratic behavior will create dissention during your Thanksgiving gathering. Such might be true – but it is much more likely that the energy surges will create a great deal of laughter. Everyone will be “off” just a beat or two. You will say something and your cousin will respond in a fashion that has nothing to do with what you just said. Both of you will be surprised and giggle at the silliness of the interaction.

Even though there will be many energy surges this weekend, those surges will not equate to pain as has been true in the past. Is that not why you were a bit frightened to read this information? You so want your holidays to be about love, and yet there is that ongoing fear that continues to be reported in the media about holiday depression and anger. Such is no longer the case. Of course, it can be if you wish to continue to play with Old Age pain. But you are not the only entity on earth affected by these energy surges. This is a shift of Universal proportions.

Perhaps, like Brenda, you are having difficulties believing that pain is no longer part of the holiday season.  She keeps thinking, “But given this set of circumstances won’t there be pain or anger?” Even though pain might remain, it will be such a mild case as to not be noticeable.

Do you not see how silly your thoughts are? We have told you for months that the New Age has arrived. That pain is no longer fashionable. That you can create whatever you want, whenever you want it. And yet you continue to believe that these new patterns will only affect a few or will happen sometime, somewhere in the future.

The irony of Old Age holidays was that much anger and pain was displayed and discussed, yet everyone looked forward to the holidays because that was when you thought you would be surrounded by love.  A bit like “bait and switch” in the retail world – bring the customers in by advertising a sale item that does not exist.

We will tell you that such “bait and switch” holiday seasons are no longer. Will you feel great love for everyone you are with? Perhaps, perhaps not. But you will feel an acceptance of the differences between you and those who usually irritate you. That is a new thought for the holidays is it not? “You are different from me, but those differences are interesting, funny, silly or just different.”  Rather than, “You have to think like I do or I will become angry.”

This holiday weekend will be bumpy in terms of energy bursts which will encourage – and at times even force you – to shift your behavior patterns. The same is happening to everyone. Your perspective will shift as is true for all of those you associate with. So laugh this weekend and have fun. You have waited eons to do so.

Despite your interest or need to be angry, you will find it extremely difficult if not impossible. Anger is an Old Age reaction to fear. When you are no longer afraid, you no longer need to be angry. What you will feel this weekend – a feeling that will grow throughout the next few months – is an inner security that is not conducive to your old holiday behavior patterns or beliefs. A shrug of the shoulders will be much more evident than angry, flashing eyes.

The New Age is truly here. It is time for you to allow the new patterns that are arriving daily to resonate throughout your being. Have fun. Play. Burn the turkey. Bump your head on the oven door. And laugh. Life is so fun. Not life can be such fun – but life is so fun. So be it. Amen.

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So let’s see. Where were we? Oh, yeah. You were looking at your Bottom Line, weren’t you? And I was saying if you like that number, just wait, and if you don’t like your bottom line, wait. In either case, it’s going to get worse!

You won’t like this, but all those expense line items, well guess what? Rent, utilities, insurance, benefits, advertising, the cost of a ream of recycled paper for your printer. You know which direction they’re all headed, don’t you? How about taxes? Federal, State, County, Local. They all want a “Modest Increase” to fill their budget gap. Please, don’t get me started on the politics of that! So let’s do a quick calculation. If your Bottom line is what’s left over after you subtract your expenses from your revenues, and those expenses are increasing, what do you think that means for your Bottom Line? You got it! Not good!!

So, the first thing you should do to fix this is? Raise Your Prices! No, I’m serious. When is the last time you gave yourself a raise? Don’t you deserve one? Even a very modest 2.5% increase will have a dramatic impact on your bottom line. If you have invested in knowing your clients, understanding their business and adding value to their business…If you have been doing a stellar job of keeping your clients satisfied, they will not leave you. And there is the key, isn’t it?

What’s that? You can’t increase your prices, because you’re afraid your customers will leave you? GOOD! No, wait a minute before you go and read some other Blog. If you raise your prices, who are the customers that are going to leave you? Look carefully at each and every one of your current accounts. Mark the ones you think would leave you first, then analyze your profit margin on each. I’ll bet the ones who would bail on you over a modest price hike are the ones with the lowest profit margins. I’ll bet they suck up the most support time and company resources too. Go ahead, analyze your customers. Then ask yourself, what could you do if you freed up those resources that these low margin clients are taking up? Could you improve your support of your higher value clients? Could you dedicate some of those same resources to giving top notch service to a couple of new clients? More on this in my next post.

Yes, this looks like a very risky proposition. Yes, you must have a plan in place how you are going to announce any price increase. But there is nothing you can do which will boost your bottom line as quickly as raising your prices. It will show up with the very next sale you book. And what are you going to do about those customers who leave you? Introduce them to your competitors. Let them waste their limited resources on low margin clients.

To forecast the future, marketing leaders often look to the past. But the past isn’t always a very reliable gauge of future conditions. For proof, we need to look back to a day-in-the-life of a turkey, and implications of not preparing for possible “extreme” events around the corner.

First, let’s start with a fun exercise courtesy of Wilmott Magazine. Let’s look at damage estimates of earthquakes in California from 1970 to 1993 in the table below. Can you make an educated calculation of losses due to earthquakes in 1994?

Taking a look at the distribution of data, notice the low end is “0” and at high end, the most damage caused was “129”. So what’s your guess?

If you’re like me, you probably guessed wrong. Using the above numbers as an “anchor”, most people would reasonably assume that 1994’s earthquake was either an average of the above numbers or perhaps a bit higher than 129. Maybe you even threw out “129” as an outlier in the dataset. To be honest, I guessed around “200”.

The correct answer is “2217.2”! FEMA estimates that every year earthquake losses in the United States add up to $4.4 billion a year. But then, some extreme outliers can really skew that number, especially years like 1994 where just the Northridge Earthquake in California alone tallied $20B in damage!

Let’s get back to talking turkeys via a parable from Nassim Taleb, author of the “Black Swan”. Dr. Taleb reminds us that fat, dumb and happy is probably the best way to describe the life of a turkey. They’re fed and nurtured for three years straight. Day after day, they expect the same thing. But then, one fateful day arrives and the “life” of a turkey ends quite abruptly.

Can we accurately predict the future based on reviewing and analyzing historical data? Sometimes, but we have to make assumptions of similar conditions, a normal distribution, and event independence. Complex systems will have none of these characteristics. Dr. Taleb says as much; “Real life isn’t a casino.”

Indeed, the parable of the turkey and the earthquake loss estimation exercise show us that predicting the future in complex systems can be a futile exercise because there are so many unknowns, changing conditions, and inter-connecting relationships. Extreme events that carry a huge impact happen, and some would argue they’re happening a whole lot more often as interlocking financial markets and globalization become commonplace.

Should prediction exercises be avoided? Nassim Taleb would argue otherwise; “We need to start thinking of the inconceivable,” he says. And while we cannot determine the exact probability of tomorrow’s events, we can “get a general idea about the possibility of their occurrence.”

And that’s where scenario planning comes into play. Bill Ziemba, author of the aforementioned Wilmott Magazine article says, “Getting all the scenarios and their probabilities right is impossible and doesn’t matter much anyway. What is important is to cover the board of possible occurrences. Then you will make sound decisions with risk under control.”

The fact is, like the turkey, we just don’t know what tomorrow will bring. So, plan for the five to seven most likely occurrences and then develop contingencies based on those scenarios. French microbiologist Louis Pasteur says it best, “In the fields of observation chance favors only the prepared mind.”

For a turkey, today may appear like any other “normal” day. However, tomorrow could be the chopping block.

Questions:

• Nassim Taleb says, “It is only in very rare circumstances that probability (by itself) is a guide to decision making.” Does this mean that historical data analysis isn’t worth the effort?
• If chance favors the prepared mind, what’s the “next unexpected twist” that marketers should be looking for?

With the final home game for one of the most decorated college football players in history this Saturday, we’ve decided to look ahead to what will be the future for Tim Tebow in the National Football League.

There are two basic ideas that we want to get across about Tebow.

1) He’s not a first round NFL draft pick.

2) Barring a change in his skill set, Tim Tebow is not an NFL Quarterback.

That being said, a little exploration of our statements is probably necessary. We do not think that Tim Tebow belongs in the first round of the draft. That does NOT mean that we think he will be taken later. In all likelihood, he will go somewhere in the 20’s. Perhaps to a team like Jacksonville, which is in dire need of headlines and good press and could play the “local boy” angle to get some fans in the stadium. We also think that it would be best for Tebow if he did not go in the first round. The change to an NFL style offense will be rough (and a possible position change, but we’ll cover that later), he doesn’t need the pressure of being a first round pick and potentially a “franchise savior.”

Tebow's Future?

On our other point, it’s the truth. (You see what we did there?) Urban Meyer’s offense is unique, and that means he’s not helping his QB’s if their goal is the NFL. Look at the most recent Meyer QB to go to the NFL, Alex Smith. Right now Smith is a career 55% passer with a QB rating of 66.5 (stat link) Not quite JaMarcus Russell bad, but still not close to good. Even this year, when he’s supposedly playing “well”, he’s only thrown two more TD’s than INT’s, and he’s had a passer rating higher than 90 once. (Week 7, in the second half @ Houston). We’re not saying that Tebow will be Smith, but it’s a comparison.

Which bring us to the idea of a possible position change. He’s essentially to slow to be a running back in the NFL, not to mention his running style would lead to a short shelf life in that role. We do not know how good his hands are, but Tight End is certainly an option. He’s quick enough to get open, and physical enough to block. Still we’re not buying it.

“But couldn’t he be a Pat White type ‘Wildcat’ QB?” Simply put…no. Teams run the wildcat to confuse defenses in an effort to create big plays. Pat White helps this effort because he is a gifted open field runner. Tebow is not.

Tebow will NOT be this.

Pat White is also rather fast. As we’ve already covered, Tebow, while not “slow” certainly isn’t “fast” either. If teams wanted to average three yards and a cloud of dust with their wildcat playbook, then Tebow would be the guy. But that’s not the goal of the offense. So to say it again, Tim Tebow is not a QB in the NFL.

To wrap this up, we think Tebow will go in the first round, but he doesn’t deserve to be there. He’ll probably have to change positions, TE is a possibility, as is a defensive front seven position, but that would likely take awhile. Our best guess – you won’t see Tim Tebow making an impact on a football field after the National Championship game for at least three years.

The Powerline blog has done an excellent job of summarizing the issues surrounding the Climatgate/CRUtape Letters in the past couple of days. Since they reference WUWT in the most recent article, it seems relevant to also post here.

It seems Dr. Jones frets about the “weather, not climate” issue that we have been so often chastised for, whenever WUWT covers a record cold event, or a record snow event. We’ve seen quite a few of those lately. It seems CRU is concerned this “weather” may become a trend. Maybe they’ll just blame it on China and SO2 emissions. There’s an app for that. – Anthony

TV weather forecast from the UK -"over the top re cold"?

POWERLINE:

We’ve written about the leaked emails and other documents from the University of East Anglia’s Climatic Research Center here, here and here. Another intensely interesting email thread, which doesn’t seem to have gotten much notice, relates to the fact that the last decade, contrary to the alarmists’ predictions, has tended to get cooler, not warmer.

At the end of 2008, the scientists at East Anglia predicted that 2009 would be one of the warmest years on record:

On December 30, climate scientists from the UK Met Office and the University of East Anglia projected 2009 will be one of the top five warmest years on record. Average global temperatures for 2009 are predicted to be 0.4∞C above the 1961-1990 average of 14 ∫ C. A multiyear forecast using a Met Office climate model indicates a rapid return of global temperature to the long-term warming trend, with an increasing probability of record temperatures after 2009.

We know now that the alarmists’ prediction for 2009 didn’t come true. What’s interesting is that in January of this year, another climate alarmist named Mike MacCracken wrote to Phil Jones and another East Anglia climatologist, saying that their predicted warming may not occur:

Your prediction for 2009 is very interesting…and I would expect the analysis you have done is correct. But, I have one nagging question, and that is how much SO2/sulfate is being generated by the rising emissions from China and India…. While I understand there are efforts to get much better inventories of CO2 emissions from these nations, when I asked a US EPA representative if their efforts were going to also inventory SO2 emissions (amount and height of emission), I was told they were not. So, it seems, the scientific uncertainty generated by not having good data from the mid-20th century is going to be repeated in the early 21st century (satellites may help on optical depth, but it would really help to know what is being emitted).

That there is a large potential for a cooling influence is sort of evident in the IPCC figure about the present sulfate distribution–most is right over China, for example, suggesting that the emissions are near the surface–something also that is, so to speak, ‘clear’ from the very poor visibility and air quality in China and India. So, the quick, fast, cheap fix is to put the SO2 out through tall stacks. The cooling potential also seems quite large as the plume would go out over the ocean with its low albedo–and right where a lot of water vapor is evaporated, so maybe one pulls down the water vapor feedback a little and this amplifies the sulfate cooling influence.

Now, I am not at all sure that having more tropospheric sulfate would be a bad idea as it would limit warming–I even have started suggesting that the least expensive and quickest geoengineering approach to limit global warming would be to enhance the sulfate loading…. Sure, a bit more acid deposition, but it is not harmful over the ocean…. Indeed, rather than go to stratospheric sulfate injections, I am leaning toward tropospheric, but only during periods when trajectories are heading over ocean and material won’t get rained out for 10 days or so.

In any case, if the sulfate hypothesis is right, then your prediction of warming might end up being wrong. I think we have been too readily explaining the slow changes over past decade as a result of variability–that explanation is wearing thin. I would just suggest, as a backup to your prediction, that you also do some checking on the sulfate issue, just so you might have a quantified explanation in case the prediction is wrong.

Otherwise, the Skeptics will be all over us–the world is really cooling, the models are no good, etc.

Sulphur dioxide, like carbon dioxide, is emitted as a result of industrial activity. Unlike carbon dioxide, it is actually a pollutant. But whereas carbon dioxide tends to warm, sulphur dioxide tends to cool, and MacCracken suggests that SO2 emissions from China and India may well be offsetting the temperature impact of CO2. The net effect of human activity, therefore, may be much closer to neutral than the alarmists have been claiming.

How did the British scientists, whose careers are committed to the proposition that human activity is causing catastrophic warming of the globe, respond? Surprisingly, Tim Johns reacted with insouciance:

Mike McCracken makes a fair point. I am no expert on the observational uncertainties in tropospheric SO2 emissions over the recent past, but it is certainly the case that the SRES A1B scenario (for instance) as seen by different integrated assessment models shows a range of possibilities. In fact this has been an issue for us in the ENSEMBLES project, since we have been running models with a new mitigation/stabilization scenario “E1″ (that has large emissions reductions relative to an A1B baseline, generated using the IMAGE IAM) and comparing it with A1B (the AR4 marker version, generated by a different IAM). The latter has a possibly unrealistic secondary SO2 emissions peak in the early 21st C – not present in the IMAGE E1 scenario, which has a steady decline in SO2 emissions from 2000. The A1B scenario as generated with IMAGE also show a decline rather than the secondary emissions peak, but I can’t say for sure which is most likely to be “realistic”.

The impact of the two alternative SO2 emissions trajectories is quite marked though in terms of global temperature response in the first few decades of the 21st C (at least in our HadGEM2-AO simulations, reflecting actual aerosol forcings in that model plus some divergence in GHG forcing). Ironically, the E1-IMAGE scenario runs, although much cooler in the long term of course, are considerably warmer than A1B-AR4 for several decades! Also – relevant to your statement – A1B-AR4 runs show potential for a distinct lack of warming in the early 21st C, which I’m sure skeptics would love to see replicated in the real world… (See the attached plot for illustration but please don’t circulate this any further as these are results in progress, not yet shared with other ENSEMBLES partners let alone published). We think the different short term warming responses are largely attributable to the different SO2 emissions trajectories.

So far we’ve run two realisations of both the E1-IMAGE and A1B-AR4 scenarios with HadGEM2-AO, and other partners in ENSEMBLES are doing similar runs using other GCMs. Results will start to be analysed in a multi-model way in the next few months. CMIP5 (AR5) prescribes similar kinds of experiments, but the implementation details might well be different from ENSEMBLES experiments wrt scenarios and their SO2 emissions trajectories (I haven’t studied the CMIP5 experiment fine print to that extent).

Cheers,
Tim

Got that? Here is a translation: assumptions about SO2 emissions do have a “quite marked…impact” on global temperatures under the warmists’ various models. What impact they have varies from model to model. Which model is correct (if any)? Who knows? But as a result of increased SO2 in the atmosphere, there is “potential for a distinct lack of warming in the early 21st C.”

That must come as a great relief, since everyone involved in this exchange has been telling the public that global warming is an imminent catastrophe. But no! The prospect of a “distinct lack of warming in the early 21st C[entury]” is bad, because “skeptics” would “love” it!

Phil Jones, Director of the Climate Research Unit, now weighs in. Does he welcome the idea that, contrary to his own predictions, there may be little or no warming in coming decades? No!

Tim, Chris,

I hope you’re not right about the lack of warming lasting till about 2020. I’d rather hoped to see the earlier Met Office press release with Doug’s paper that said something like -half the years to 2014 would exceed the warmest year currently on record, 1998!

Still a way to go before 2014.

I seem to be getting an email a week from skeptics saying where’s the warming gone. I know the warming is on the decadal scale, but it would be nice to wear their smug grins away.

Better that the Earth experience the cataclysm of global warming than that the skeptics be proved right? It makes one wonder how seriously Jones believes in the catastrophe of global warming. Jones then frets about whether the weather is really as cool as the weathermen are saying:

Chris – I presume the Met Office continually monitor the weather forecasts. Maybe because I’m in my 50s, but the language used in the forecasts seems a bit over the top re the cold. Where I’ve been for the last 20 days (in Norfolk) it doesn’t seem to have been as cold as the forecasts.

So the very climate scientists who keep saying that global warming will be an unparalleled disaster for humanity are telling the Earth: Heat up, damn it!

But let’s go back to the main point. Apparently the alarmist climatologists acknowledge that SO2, frequently emitted in conjunction with CO2, nullifies, wholly or in part, any warming tendency associated with the CO2. What is the net effect? This is, obviously, an empirical, quantitative question. But these scientists can’t answer it, not only because each of their models gives a different answer, but because they have no idea how much SO2 is being emitted by the main countries that produce that pollutant, India and China. Having no idea what the facts are, their models are useless. It does appear, however, that one obvious alternative to impoverishing humanity in a most-likely-futile effort to stave off global warming would be emitting a whole lot of SO2 over the ocean, and continuing those emissions indefinitely rather than banning them as is currently contemplated by the warmists’ models.

Climate science is in its infancy, and every proposition is controversial. What climate scientists like those at East Anglia don’t know dwarfs what they do know. They can produce a model for every occasion, but are the models any good? If so, which one? One thing we know for sure is that they don’t generate reliable predictions. In every scientific field other than global warming, a scientific hypothesis that generates false predictions is considered disproved. When it comes to global warming, however, there is no such thing as falsification. Which is the ultimate evidence that the alarmist scientists are engaged in a political enterprise, not a scientific one.

Please visit the Powerline blog here.

Budgeting and forecasting have never ranked high on the list of favorite tasks for the small business owner or the major company executive. However, if planning and controlling are two of the basic tasks of management, budgeting and forecasting must be done.

The “three step method” is a procedure that will get the job done for the small business owner and give an overview to the major company executive. It will yield maximum results with minimal input.

Let’s begin with making a couple of assumptions. First, “facts is facts” so lets be realistic and use the information available to us. Second, although nobody can predict the future, nobody knows our business as well as we do so let’s not be reluctant to make a prediction. And finally, we are most concerned with directions, trends and relationships and not with decimal point accuracy. In fact , since we can’t foresee the future we know we won’t be accurate. So let’s not get hung up on accuracy, just ballpark the numbers and get the show on the road.

The three step method requires three pieces of paper. Make thirteen columns across the top of the first page. In the first twelve put your monthly sales figures for the last year and in the final column put the yearly total. Round off the numbers so they are easy to use. Do not get hung up by incomplete information and don’t waste time on excessive information retrieval. For example, if you are trying to forecast for the year beginning with January and its only October, what should you use for the last three months of the current year. Guess! That’s right, guess! You won’t be that far off.

Next, take no more than one hour and think of all the factors that effect the sales in your business. Choose the three factors that will have the greatest influence on your business in the coming year. List them under your previous years sales including a plus or minus number for the percent that you estimate each factor will impact your next years sales.

Below the three major factors list your three major customers. If your business doesn’t have distinct customers, improvise. If you are in the retail business, list your three big sales periods. For example, Christmas, Labor Day and July 4th. Next to each of the three major customers, estimate the percent change in their next year’s purchases.

Finally, list your three major competitors and the percent impact they may have on your business in the coming year. If your business doesn’t have direct competitors, list the major competitive factors such as new technologies, substitutable products or changing fashions.

You are now looking at one piece of paper with a row of numbers across the top and three lists, influencing factors, customers and competitors, with each list containing three items. Now reproduce the chart at the top of the page on the bottom of the page. Only this time, after reference to the top numbers and evaluation of your estimates in the three sets of three, write in your forecast for the coming year. Take less than one hour and adjust the numbers until you are comfortable. You should now be looking at the world’s best preview of your business for the coming year.

Take a second piece of paper and begin to examine the costs involved in the operation of your business. For different businesses, the emphasis will vary here, but remember to stay with the threes and keep it simple.

Divide the page into three equal segments. Label the top section cost of goods sold and make the thirteen columns as you did on the first page. Fill the columns in with your cost of goods sold for the current year. If the information is not easily available, estimate. If you don’t have access to monthly information, take the annual information and estimate the monthly allocation or just do an annual analysis.

Calculate what the cost of goods sold was as a percent of sales for the comparable period. Take the January cost number and divide it by the January sales number on the top of the preceding page to arrive at the percentage figure. List the three major components of cost of good sold. Briefly consider what is in store for each of these components in the year ahead, and estimate a plus or minus percent for each. At the bottom of the first third, reproduce the thirteen columns. Evaluate the current years experience and consider the three major elements for the coming year. Make your forecast for the year ahead and compute what the the cost of goods sold will be as a percent of sales for the coming year.

In the second and third sections, review your administrative expenses and miscellaneous expenses in the same manner. Make sure to identify the three major elements for both categories.

On the third and final page, use the forecasted numbers to create your projected income statement. If you like what you see, get about the business of making it happen. If you don’t like what you see, you’re lucky because there is still time to develop strategies and take action to influence the coming year. That’s the real payback. If you wait till next year, its to late.

The three step method will give you a realistic look at the future with minimal effort. Because it’s your business, you will be able to adapt the three step method to explore other areas of your business in greater depth.

In an earlier post, I pointed out that there really are only three ways to improve your bottom line – reduce your expenses, raise your price and sell more. I am certain others will say there are more options, and I am not saying they are wrong. But humor me for a moment, while we explore that last option – Sell more stuff.

There are only two places where you can sell your stuff – New Business and Clients. Okay, let’s look at your clients first. Why? Because that is where you should start. It really doesn’t matter what you sell, you should always look at your clients, current as well as past ones, first. Why? Because they know you. They bought from you before, and, unless you have done a really lousy job of nurturing a relationship with them, they will reply to your emails and they will return your calls. Your company has an investment in winning their business and, hopefully, earning their trust, so I highly recommend you start with your client base.

Get to know your clients. Learn as much about them as you can. Know what they do, who they are, and how they work. Know who the key contacts are, who their supervisors and their assistants are. Know what their purchasing process is and how their budget cycle works. Know as many people in their company as you can – from the Gatekeepers and the workers on the loading dock to the folks who review, approve and sign the requisitions. Find out everything you can about their business – is it growing, shrinking or on life support? Sure, this takes time and effort, but these folks have already bought from you. They are the folks that can offer you the best ROI on the time you invest to get to know them.

Your clients can do many things for you. They can continue to purchase what they have bought from you in the past. They may very well be buying things that you can offer them from other companies. If you have done a great job of adding value to them, they can refer you to others they know who may buy from you. You can follow your contacts as they move to new jobs with other companies. Satisfied clients can be one of your greatest assets. Make it the top priority of your entire company to make each and every client a “Raving Fan.” It will pay off handsomely.

New Business? This of course is an area every company must focus on. It means new revenues to your company, so you need plans, strategies and tactics for this business segment too. There are only two places where you can “Win” new business from – Start-ups and taking business away from your competition. It takes time to develop new relationships and to earn their trust. One tactic which nearly always is required in the sales process is references. Here’s one way you can use your client list.

“I know that your success depends in some part on my company delivering you the products/services you need, on time and at a fair price. The Top commitment of my company is to make sure that we have satisfied customers. Our focus is making all our customers comfortable that we do what it takes to help you be successful. Here is a list of all our clients. Please, feel free to contact any of them and ask them how well we are meeting that objective. And if, by chance, one of our clients tells you there is an issue that we have not addressed, I want to know about it right away.” This is the most powerful marketing you can have. Whether you are the first in the door or the last company pitching, this can win you New Business…but only if you have have “Raving Fans” as clients. Just one more reason to focus first on your customers. Happy Selling!

Dear Ones,

Brenda thought she was going to channel how pride has evolved in this New Age. We will address that issue at a later date.

A much more important issue for those of you following her posts is your personal drama this past week.

Some of you may not have noted a great deal of trauma in the last few days. Such does not  indicate you are not part of this New Age movement. You are merely at a different place than those who are ‘going with the flow’ of these New Age energy surges. Do not be concerned. You will catch up at a later date – and you will do so with a bit less trauma than those who are the scout masters of the movement.

The majority of you reading these materials have opted to be pioneers, rather than scout masters for a variety of reasons – not the least of which is you wish to explore your new world with a bit more information than is true for the extremely limited knowledge held by those affected by this week’s hurricane.

This week, those of you who are the New Age scouts have been through a hurricane of vast proportions. At times, you found yourself in the eye of the storm – it seemed as if the world around you were exploding and yet,  you were completely calm and accepting. At other times, you were part of the storm – ranting and raving and thrashing about. Now what is the distinction between those two activities and why were you involved in both?

When you were in the eye of the storm,  you rested physically and at the same time allowed the new energy bursting forth to become part of you. You have had similar experiences in the past, it is just that this week was more dramatic than most others you have noted. Perhaps you found it difficult to concentrate or you were obsessed with something that means little to you. Or you needed to be outdoors no matter what the weather was. With those activities, you were grounding yourself to earth. A bit like animals who gather together prior to a major storm. You knew something was different, something was amiss. But you did not understand what that something was. You were irritable, unreasonable, cranky and most of all, exhausted. Would you not display many of the same characteristics following a difficult  medical procedure? What occurred this week was yet another major energy thrust into your being. Two years ago, you could not have maintained your physical being on earth with such a dramatic input of energy. As each energy surge occurs and becomes part of your being, you are able to withstand greater and greater surges of energy. And of course, each energy surge is designed to broaden and enhance your creative skills.

There is also the issue of what occurred during the times you felt you were part of the hurricane. Perhaps you unreasonably lashed out at someone or something – which surprised even you. Or perhaps you could not find anything to laugh about. Or perhaps those people who you have ignored for a long period of time irritated you yet once again – bringing back all of the anger and rage you thought you had rid yourself of.  Perhaps your dreams were hurtful or angry. Perhaps you decided that none of your physical dreams were possible. Or that you were all alone and the world was not a wonderful place to be – a bitter feeling about life in general. Somewhat like what you would feel if your home and community were destroyed by a hurricane.

What does all of this hurricane, eye of the storm activity mean for you? We will tell you that you have again shifted in such a dramatic fashion that it will take you several weeks to decompress. Do you not remember that astronauts returning to earth must decompress prior to returning to their earth lives? Such is true for you. You entered the brave new world, the New Age several months ago. But the energy thrust you received this week was the difference between being an astronaut who merely circles the globe and one who lands on the moon.

You have completed an extremely brave and commendable activity this week. Allow yourself to rest. Give yourself accolades for a job well done. And once the dust has settled – which might take a few days or even weeks – note how your direction is a bit different from what was true prior to this week. Oh, perhaps not enough to be noted by those who are not that close to you, but different enough to be noted by you and those who are on the same ‘wave length’ or search.

We will discuss what you are finding and feeling a bit later. For now, know that you have completed an extremely difficult transition and yet again, you have done so extremely well. We continue to marvel at your bravery. We continue to marvel at your physical strength. Most of all, we continue to marvel at your commitment to this New Age transition. So be it. Amen.

Life Tapestry Creations.com       If you would like to receive my free blogs as they are posted, please click the – Subscribe to Brenda’s Blog by E-mail – line and complete the subscription by providing your e-mail address.

What a week!!!!! Brenda

206444     การพยากรณ์ทางอุตสาหกรรม     Industrial Forecasting

หลักการวิเคราะห์และพยากรณ์แนวโน้มของการเปลี่ยนแปลงทางอุตสาหกรรมโดยพิจารณาจากหลักวิธีเชิงปริมาณทางสถิติและการพัฒนาโครงงานทางด้านอุตสาหกรรม กรณีศึกษาและแบบจํ าลองทางการพยากรณ์

(General approaches to forecasting and analysis of industrial trends, quantitative andstatistical methods, industrial projects development, case study and forecasting simulation.)

(206444 มหาวิทยาลัยเกษตรศาสตร์)

Two bigs storms are hitting Washington State, one blowing in last night, another blowing in this afternoon. So far, no landslides have been reported over major roadways or have made it into the media (although where we had rainfall so far isn’t well covered by the media). However, this last storm added water into already soaked hillsides, setting up the stage for the potential for sliding this evening and into tomorrow.
We don’t have a forecasting system up yet (so far I have been swamped by other projects and haven’t been able to spend enough time getting it going). But, we can try and make some estimation of areas that will have a higher chance of sliding. I would put this akin to a back of the napkin calculation.

Landslide Risk Map Nov 19-20

This is our forecasted rainfall for the next day or so (including some of the precipitation from yesterday). The things to note in all of this, much of the higher elevations where higher rainfall is shown is mostly snow, I never parsed that out in the file. Next, I just used forecasted inches of rainfall to determine where the difference between low and high should be. It is a little arbitrary, but I did look back at the other smaller storms with somewhat similar soil saturations to help determine when we started seeing landslides initiating. This is more of an experiment at this time to see if we can make a really simplified forecasting system that tries and predicts which counties will be at risk of landslides during a storm. A note of caution, even in the low areas we can expect landslides, especially in urban areas. In less urban areas, water usually knows where it wants to go, has been going there for a long time. In urban areas, we have a lot more control over that water, we channel it on roadways and usually discharge it into sewers or into creeks. The problem, if a road channeling water is blocked (either by leaves, debris or some other thing), that water can be diverted, saturating a nearby hillside and causing a landslide, even though rainfall was low. This can also occur with property owners concentrating water on their property. There are a lot of other factors involved of course, but you get the idea.

Many are deep into planning for 2010 – some of us are still thinking about it too! Forecasting, budgets, projections. With the continued uncertainty of the economy, does it really make sense to go through this exercise? If you find yourself asking this question, maybe you should consider the alternative.

If you don’t have a plan, then you should plan to Fail! Yeah, heard that one before, haven’t you? But the past 10 or 11 months, you have had to revise your numbers on a regular basis. Why? Because your revenues have just not met the goals. And why is that? Well, your Head of Sales says the clients and prospects just are not making purchase decisions. So. what are you going to do about that? Here are a few ideas:

1. Congratulations! At least you have the smarts to make a plan and track your performance. At least you know the value of having a budget and revising it regularly. Too many companies go through the process of planning, only to have that plan relegated to the left hand drawer, never to see the light of day. Companies that do that are addicted to business’ most addictive drug -
Hopium!

2. So where to start? Well, let’s start with what you know. Look at your most recent bottom line – Revenues minus Expenses equals what was left over. That was the bottom line. Past tense. If you don’t like it, wait a minute, it gets worse. If you do like your bottom line, just wait a bit, it probably gets worse too. Why? Things change. That bottom line was as of the last time accounting ran the numbers. What really counts is what it will do in the future. Well in this very basic form, there are some variables. The Top line is revenues – what do you expect to happen there? Are they decreasing, flat or increasing? Those are your only three choices. What are you forecasting for your revenues next year? Be honest! No fair dipping into the Hopium…you are going to be held responsible for hitting your revenue numbers. Next thing to look at, and this is where it gets scary, are the expenses. Again, what are you forecasting. Again, you have the same three options – decrease, flat and increase. Keep in mind there are lots of different expense items, and every line must be scrutinized to see what it is going to do in the coming months. Rent, utilities, insurance, and many other “normal business expenses” – you know which direction these are headed, don’t you? Salaries, benefits, marketing and many more line items. Each and every one must be carefully looked at, managed and tracked. You may forecast some of these to decrease, but recognize it takes time for changes to work through a business. In most cases it costs money to implement efficiencies and cost reductions. The good news is small changes add up. They make a difference. So plan to manage your expenses carefully.

Okay, now that you are done with that grueling exercise, again, what does your new, forecast bottom line look like? Are you satisfied with it? Hmmm?

3. If you are not pleased with the result -and like most of us, you probably are not – what can you do about it? Well, you do have a few options. First, you can sell more stuff – more widgets and services. You can close more business. Second, you can raise your price. Third, you can shut your doors. Sorry, but there you have it. Those are your options. Short of buying the competition out or hitting the lottery, I can’t really think of any more.

I didn’t intend for this to get this long…but it is really important to the health and well being of your business. I will expand on how you can approach selling more stuff and how and why you should consider raising your prices in my next post.

chapter 1 ; introduction to Managerial Economics

chapter 2 ; The Firm and Its Goals

chapter 3 ; Supply and Demand

chapter 4 ; Demand Elasticity

Chapter 5 ; Demand Estimation

Chapter 6 ; Forecasting

Chapter 7 ; The Theory and Estimation of Production

Chapter 8 ; The Theory and Estimation of Cost

Chapter 9 ; Pricing and Output Decisions: Perfect Competition and Monopoly

Chapter 10; Pricing and Output Decisions: Monopolistic Competition and Oligopoly

Chapter 11; Special Pricing Practices

Chapter 12; Economic Decision Making in the 21st Century: The “Old” Economics of the “New Economy.”

Chapter 13; Capital Budgeting

Chapter 14; Risk and Uncertainty

Chapter 15; Government and Industry: Challenges and Opportunities for Today’s Managers

Just the link: Prognosen und Vorhersagen.

Dear Ones,

Perhaps you have not yet thought about your energy shifts in this fashion but you are New Age explorers. The only difference between you and Christopher Columbus or the Vikings is that you are exploring your inner realms.

To many of you, exploring your inner realms  appears to be a much more sedate venture. We beg to differ. You are as courageous as any explorer you can envision.

Please remember that the vast majority of those who explored the physical earth did so in groups. Granted their fellow explorers might not have been friends or relatives, but others were available with whom to discuss fears and concerns. Very seldom did one individual brave the elements to explore a portion of the earth.

Each of you is accessing these shifts in a unique fashion so not all of you are ‘on the same page’ at the same time. Do not let this thought frighten you. That is how it should be  - you are truly unique individuals and these shifts are about freedom.

You are moving the earth into the New Age and you are doing so in millions of unique ways – all of which lead to the same ending, but with somewhat different routes. Perhaps an easier analogy would be the one we used a few days ago about infants learning to walk.

Even though most infants learn to walk, all do so a bit differently and in their own time frame. You cannot make someone want to learn to walk, nor can you push anyone into the New Age. Some infants initiate their walking process with crawling, others skip this stage. Some run almost immediately, others wait for a period of time to be that adventuresome and on and on.

And so it is with you and these energy shifts. Some of you are already running. Others of you are thinking, just thinking about crawling. And others of you are wondering if you are interested at all in walking. There is no group action such as was true for the three boats that sailed from Spain under the direction of Christopher Columbus. And on each boat was a crew with the same thought in mind – reaching the destination plotted prior to leaving the shore and then returning to their home base.

You are explorers of extreme bravery for yet another reason. As was true of the earth explorers, you are not quite sure what you will find, but you have a large enough knowledge base to understand that your life will never be the same. Let us explain. The earth explorers fully expected to land at certain points and then return to their home base with the riches they sought – whether that be gold, new lands or just new experiences. They did not expect their life to be that different once they returned, other than they would be a bit older, wealthier and perhaps not all of their family members would yet be alive.

You, on the other hand, know without a doubt that your life is shifting. You note on a daily basis how your interactions with others is changing – that what you once accepted as a given because you were taught by society that such was so, no longer interests you. You are once again the belligerent ‘flower child’ of your youth. The difference is you wanted your world to shift in your youth. Now you are not so sure.

Granted, you do not particularly like your job or your company, but that job pays your bills. Then one day you have an urge – like an infant deciding she needs to learn to walk – to leave that job. How exciting from a ‘flower child’ point of view and how terrifying from the adult baby boomer point of view. Despite your fears, despite not knowing where you are going or why, you leave that job. Do you see your courage? Do you not deserve accolades as rich as any given to any earth explorer?

We have often pointed out that love and joy are keys to the New Age. It is time to love yourself. And at this point, one of the easiest and most appropriate methods of doing so is giving yourself accolades for even considering learning how to walk, how to adjust these energy shifts to best meet your needs. You are extremely brave. Allow yourself to know that and to remember that as you move through these energy shifts.

Baby boomers you are explorers of the greatest magnitude. We applaud you and hope that you will allow yourself to do the same. Do you not remember the grins and giggles of your infant when she first learned to walk? We are hoping to observe the same of you baby boomers as you dare to explore your new and exciting inner world. Go in peace and go in laughter. It is time and it is your role. You are a New Age explorer of the greatest magnitude. So be it. Amen.

Life Tapestry Creations.com     If you would like to receive my free blogs as they are posted, please click the – Subscribe to Brenda’s Blog by e-mail – line and complete the subscription by providing your e-mail address.

Hello Friends here we come up with our another write up on “SMC Gyan Series”

CROP FORECASTING - “PAST - PRESENT – FUTURE”

Here we would get into the nitty gritties of CROP FORECASTING.

Why is it required and what are the objectives of CROP ESTIMATION SURVEY?

Agriculture occupies a dominant place in the economy.

It is the main source of livelihood of the majority of the population of the country.

Making available food-grains sufficiently to this huge population of the country throughout the year is very much necessary, & this needs making an advance plan or estimation to predict crop yields.

Crop estimation is a “MUST” for agriculture.

There are number of reasons why a good estimation is required.

Accurately estimating the size of the crop will take the pictures or the scenario size of the crop just before harvest, increasing farming costs for that year.

Overestimate the size of the crop will mean that the quality or quantity may not be achieved.

Therefore for the accurate results, many research advance techniques are used.

A sort of track record is maintained for maintaining & achieving the accuracy of crop estimation.

OBJECTIVE OF CROP ESTIMATION SURVEY:

The main objectives of the crop estimation survey are:

i. To provide estimates of area under and production of principal food and non-food crops with a high degree of precision at the block/ district/state levels.

ii. To provide estimates of productivity of different crop at block/district/state levels.

iii. To collect useful ancillary information on the existing cultivation practices in the State.

iv. To throw lights on the cropping pattern of the State/Districts/Blocks etc.

Stay Tuned for more on this where we would get to know of that what are the procedures of crop estimation survey.

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