Business
Optimistic Forecast
An optimistic forecast in business refers to a projection of future performance that is positive and hopeful. It typically involves predicting higher sales, increased profits, or overall growth for the company. This type of forecast can be used to inspire confidence in stakeholders, attract investors, and guide strategic decision-making.
Written by Perlego with AI-assistance
Related key terms
1 of 5
4 Key excerpts on "Optimistic Forecast"
eBook - ePubPositive Psychology
The Basics
- Rona Hart(Author)
- 2020(Publication Date)
- Routledge(Publisher)
The examination of what constitutes mental health, and the centrality of optimism in demarcating the boundaries between healthy and unhealthy functioning, has prompted further research into optimism. In the past five decades a sizeable body of scholarly work has been published on the topic emerging from diverse disciplines, including health psychology, education, business and neuroscience, to name a few.To summarise this abundant research field, this chapter opens with a definition of optimism, and then presents the three leading strands of research into optimism, and examines their theoretical stance and evidence on the benefits and disadvantages of optimism.Defining optimismOptimism and its parallel construct pessimism are described as expectancies regarding future outcomes (Carver & Scheier, 2009). The research on optimism originated from the psychology of expectancies, and is therefore linked to the exploration of estimations and predictions, and to goal-directed behaviours, such as decision making and planning.Optimism is defined as a generalised expectation that good things will happen (Carver & Scheier, 2009) or “the overestimation of positive events and the underestimation of future negative events ” (Sharot, Korn, & Dolan, 2011, p. 1)While these definitions do not clearly state whether optimism is a trait or a state, nor whether it is a cognitive outlook or an emotional disposition, over the years three leading lines of research have emerged which distinguish between optimism as an attributional style (Seligman, 2006), a trait (Carver & Scheier, 2009) and an inherent human characteristic (Sharot, Riccardi, Raio, & Phelps, 2007).In line with these definitions, pessimism is described as a tendency to expect negative outcomes (Seligman, 2006). The commonly held perception among researchers is that optimism and pessimism occupy the opposite sides of a single axis (Seligman, 2006), and this is reflected in most of the measurement tools currently being used. However, these views have been challenged by researchers who claimed that the two concepts are independent, and that optimism is more than the absence of pessimism (Norem & Chang, 2002). It has also been argued that optimism and pessimism are not mutually exclusive, and that people can experience them at the same time (Peterson, 2000). In view of this debate and for the sake of simplicity, the following sections will focus solely on the construct of optimism.
eBook - ePubHow to Forecast: A Guide for Business
A Guide for Business
- James Morrell(Author)
- 2017(Publication Date)
- Taylor & Francis(Publisher)
INTRODUCTION: THE ROLE OF FORECASTINGEvery decision rests on a forecast – a view of the future. We know from everyday experience that many of the forecasts we are obliged to make will prove mistaken. Yet this does not invalidate the case for basing decisions upon forecasts. We are obliged to formulate forecasts of some kind or other as a means of determining a future course of action.Man has evolved into a highly successful surviving animal. His chances of success have been enhanced by his ability to foresee the consequences of his decisions. In that sense we are all forecasters.Forecasting is an essential discipline in planning and running a business. Success depends, to a large extent, on getting those forecasts right. We know, however, that the future is highly uncertain. Throughout our lives we are confronted with uncertainties. There is, therefore, a fair chance that we will not make the right decisions.In business we are continually confronted by the need to take decisions. The important decisions compel us to construct a route map of the future and to forecast which way our decisions will take us. A wrong decision can end in disaster. For that reason we need to bring a wide range of skills to bear on the possible and probable outcomes of the decisions.The business environment is constantly changing. It has become increasingly complex. Large organizations have the capacity to set up specialist units to provide forecasts for a wide range of subjects. All firms need to forecast the level of sales and revenues. This may require commissioned market research to establish the pattern of the market, its size and its growth potential.The firm will also require an analysis of the competition, an appraisal of product design and development and an assessment of pricing policy. This also leads to an analysis of costs, covering labour and purchase of materials, components and services. The cost of capital may also be relevant, as will premises and location.
- John Lidstone, Janice MacLennan(Authors)
- 2017(Publication Date)
- Routledge(Publisher)
Market Potential: this refers to the upper limit of demand or the expected sales of all similar product types over a given period. In general, it will tend to be relatively stable, although climate and political decisions can have an impact. This forecast represents the ability of the market to absorb a particular type of product.- ● Sales Potential: this is the estimate of a product’s maximum sales volume over a particular period of time. It reflects the demand that would exist if maximum sales-generating activities were executed in a given time period under certain market conditions.
- ● Sales Forecast this is the actual expected sales volume over the given period of time. It will be lower than the sales potential because the company will always be constrained by resources, or a focus that is on achieving the highest profit, rather than maximizing volume growth.
Why forecasting is important
It is recognized universally that there is a need to form a systematic and coherent view of the future as a basis for making decisions. Yet views on organized business forecasting frequently go far beyond healthy scepticism towards an attitude of outright cynicism. So what tends to alienate the intelligent manager?- ● Inaccessibility to the non-statistically initiated.
- ● Techniques of analysis which never bear much relation to the problems managers face.
The sales forecast involves the predicting of the product or ‘family’ sales over some specific time in the future. It is the foundation for the budgeting process and therefore influences much, if not all, of the Company’s activities.A good forecast helps in the planning and control of production, distribution and promotion activity. The forecast may suggest change in price structures, budgeting procedures or stockholding. Operational planning is highly dependent upon the sales forecast, therefore ensuring its accuracy remains essential.Mistakes in forecasting can give rise to serious errors in other areas of the company, leading to loss of profitability. For example, an underestimate of sales could give rise to underproduction, leading to lost sales, while an overestimate would mean a stockpiling of raw materials or finished goods that could end up unusable or unsaleable.
eBook - ePubAn Introduction to Operations Management
The Joy of Operations
- Ajay Das(Author)
- 2015(Publication Date)
- Routledge(Publisher)
Some time ago, Everbank USA offered a five-year gold CD that guarantees 100 percent return of capital while offering an upside potential of a maximum 50 percent return. Obviously, Everbank would have had to forecast the trend in gold value over the five-year period of the CD, to a) ensure that they do not make a loss, and b) ensure that they make a decent profit on the product. And, of course, Everbank’s customers would have had to evaluate the attractiveness of the offer, both in terms of risk and return. Why would you invest in Everbank’s CD, which limits you to a 50 percent return, albeit providing principal protection? What if the price of gold skyrockets another 300 percent in five years? How probable is that event, relative to the risk of a decline in gold price in five years? As we can see, without reasonably reliable forecasts, neither Everbank nor its customers would have a logical basis for making business decisions. Forecasting is a critical capability for a business, and, for that matter, an important part of reaching personal decisions that involve a consideration of the future.5.2.1 Importance for Businesses
Merger and acquisition decisions are influenced by forecasts of the economy, stock markets, borrowing costs, and cash flows. Forecasts of interest rates and stock market behavior inform the choice of raising capital through short-term notes, bonds, or preferred or common stock. Similarly, labor cost and wage contract decisions are impacted by inflation forecasts, while capacity or marketing decisions are affected by forecasts of demand and economic growth. Sourcing decisions are influenced by forecasts of commodity and input prices, which in turn are influenced by forecasts of demand, supply constraints, weather, inflation, and economic growth.A forecast tells us what the future may look like. If the future appears attractive, we can try to accelerate its emergence; if not, we can try to stop, stall, or change it. The most valuable forecast may be one that we stop from coming true. A forecasted slump in product demand may be preventively handled with intelligent product and price management. We can also change our business model to meet what cannot be averted. As a case in point, life expectation in the U.S. is increasing significantly.2 So, on a slightly morbid but businesslike note, how should the CEO of a funeral business respond to the forecast? More people living longer is bad news for funeral parlors—and the trend cannot be stopped or slowed in any legitimate manner! So funeral parlors are changing their business model to cope with the effects of a declining death rate. FuneralOne makes tribute DVDs that mourners seek as keepsakes, enables real time webcasts for remote attendance, and makes a Vid Tombstone that plays a 10 minute loop of the departed soul.3
Index pages curate the most relevant extracts from our library of academic textbooks. They’ve been created using an in-house natural language model (NLM), each adding context and meaning to key research topics.
