SAS for Finance

Good versus bad forecasts

Forecasting plays a fundamental role in ensuring the success and future viability of an organization. The famous camera and film company Kodak failed to forecast the growth of digital photography, for example, and has now fallen behind its peers. Coca-Cola had to famously ramp up its own production after pulling the curtains on its revamped Coke New in response to a surge in popularity of Pepsi in the 1980s. Because of this, Coke miscalculated the potential popularity of its new formula and branding and instead went back to its core formula and started calling it Classic Coke. As we can see, most business decisions involve estimates or forecasts. These decisions can range from opening a new manufacturing facility ...