FORECASTING for PROFIT

by WilsonWright '30. Wiley, 1947. Pp. 173. $2.75.

In Forecasting for Profit, Wilson Wright, economist for the Armstrong Cork Company, has written a lucid and interesting little book on the technique of using economic analysis as an aid to the management of the affairs of a large business enterprise.

As society grows more and more complex in its economics, political and social ramifications, managerial tasks in the large business organization have become increasingly specialized. To combat the dwindling vision that accompanies specialization, large firms employ the services of the professional business economist. One important function of the business economist is to educate, and keep educated, top-flight management so as to ward off the bias of specialization.

While it is conceded generally that the main objective of business is profit-making, it frequently is not realized how much managerial effort is expended to minimize the effect of chance as a factor in determining financial success or failure. In many instances risks can be reduced to a known cost since the probabilities of occurence can be measured with reasonable accuracy. But in other instances this is not so and especially is it true in attempting to forecast the future conditions of business in general and a business in particular. Here is where that brave soul the business economist enters.

The author discusses successively business forecasting, the forecast itself, factors determining sales and profits, the estimate of the economic situation, important statistical data (largely from governmental sources), the content and velocity of the money stream, inter and intra-industry competition, cyclical and seasonal fluctuations of business activity, and a great variety of other pertinent material. One cannot help being impressed by the formidable array of data that the business economist must digest and evaluate if his forecast is to be valuable. Moreover, he has to be an extraordinary individual. As the author states in his concluding chapter, the business economist must possess an unusual temperament. He must be immune to the efforts of the masters of the art of persuasion. He must not succumb to the tides of mass opinion. He must subdue his hopes, desires, and fears so they will not affect his judgment or ability to reason calmly. And he must be able to hold his own in a conference with his peers and superiors when the tentative forecast is being molded into the accepted forecast.

Writing for business executives, other professional business economists, and students who might consider the career of a business economist a challenging future, Mr. Wright does a competent job. He has provided his readers, also, with a brief but well selected bibliography of books and periodicals.