Economics and Politics of Public Policy Assignment

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ECONOMICMANAGEMENT ANDPUBLIC POLICY
ContentsINTRODUCTION...........................................................................................................................3PART 1............................................................................................................................................3A) Importance of demand forecasting.........................................................................................3B) Different methods of demand forecasting..............................................................................7PART2...........................................................................................................................................11In evidence to climate change affects its decision making process...........................................11CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16
INTRODUCTIONEconomic management is a process of managing resources, finances, income,expenditure and those aspects which are related to economic development. These resources canbe related to a business organisation, economy of a country or any community. Public policy arethe guidelines and regulations provided by governmental authorities in order to ensure propermanagement of above resources of economy (Bybee, 2013). In order to develop anunderstanding about above concepts, two real life organisations are selected. For first part“Tesco PLC” is selected and for second part “Sainsbury's” is selected. Main aim of this projectreport is to provide a detailed understanding about importance of demand forecasting anddecision making. Under first part of this project report, a detailed overview about demandforecasting along with various methods are discussed. In the second part of this project, climatechanges are analysed and evaluated in relation to Sainsbury's in order to ascertain its influencesin decision making process. To Understand these concepts various examples are mentioned inthis report so that an overview can be provided about the companies and economic management.Impact and adaption into decision making is presented in this report along with variouscompetitive advantages.PART 1A) Importance of demand forecastingDemand forecasting is a procedure of estimating future values for demand in future timeperiods. This process includes future estimation for sales and incomes based on whichmanagement can develop a suitable marketing plan. Main aim of this process is to predict futuredemand by considering all uncontrollable and competitive forces(Kneese and Bower, 2013).These forces are to be faced by organisations which includes market demand, market forces andexternal factors. Elements present in these forces are controllable to an extend but for rest of theuncontrollable forces, companies prepare and develop plans for contingencies. The concept ofdemand forecasting enables an organisation to take business decisions which can result inbeneficial for the companies. These decisions can include managing funds, allocating prices toproducts, purchasing raw materials and organisational process.In order to analyse the concept of demand forecasting and its importance, an organisationis selected that is Tesco PLC. This company operates in retail industry which has chain of3
supermarkets in United Kingdom. This company is considered as largest retailer of UK whenmeasured on the basis of market share. This organisation deals with end consumers due to whichthey have to make sure that demand of their customers must be fulfilled. In order to fulfil thedemand effectively and efficiently it is important to pre ascertain future demand so that measuresfor organisational performance can be prepared. Due to recent intense competition between Asdaand Tesco, management of Tesco has decided to ascertain importance of demand forecasting inorder to justify the statement which is “anticipation of future demand is necessary to producers toarrange required factors of production to meet future demand”. Few importance of demandforecasting is described below along with their examples:Fulfils objectives:Every business organisation has few main objectives which are set at the time ofincorporation and are amended time to time due to business situations. These objectives are theprimary goals which are needed to be fulfilled by the company by their business operations.Demand forecasting plays an important role in fulfilling these objectives (Bowe, Ball and Gold,2017). Tesco PLC is a chain of retail supermarkets which has primary objective of profitmaximisation and client satisfaction. Demand forecasting predicts future demand for theirproducts by which they can attain satisfaction of their customers. For example: Tesco has settheir objective to sell 50000 units of their product in the period of one month. In order to fulfilthis goal, organisation will conduct demand forecasting. If the demand which is predicted to low,then management of the company will take corrective actions so that their objective can befulfilled.Assist in preparation of budget:Budgets are the written documents which includes future estimated expenses andincomes. These budgets are the estimation of future events and expenses. These budgets areprepared by using demand forecasting. While developing budgets for Tesco, management usesthese methods of demand forecasting so that they can record expenses and incomes which areproportional to demand. For example: Management of Tesco PLC, has estimated their demand tobe 25000 for a product which is priced at 10 dollars. This information will help them to ascertaintheir future sales which will be calculated by summing up price and units demanded for theproduct that is (25000*10=250000).Effective decision making:4
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