Business Forecast and Global Economics - Assignment Example

Indonesia which happens to be the major producer of palm kernel oil predicts increased yield which triggers the increased production of coconut oil-related products. From the social reorganization observed across the world, there is the increased use of various products like cosmetics that are derived from coconut and this is likely to boost the demand for this god substantially.

Data on quarterly demand in the US from 2012 June to 2013 March indicated below can be used to derive the regression line which would in turn be used for predicting future demand.

Quarters

6/2011

9/2011

12/2011

3/2012

6/2012

9/2012

12/2012

3/2013

Price in,000 $

5

2

12

9

15

6

25

16

Quantity demanded in metric tons

64

87

50

71

44

56

42

60

The regression line of price and quantity demanded in this case is: Quantity (Y) = 76.6605 – 1.5456 X (prices)

From the data above, it is evident that demand had significantly fluctuated due to unstable prices, but considering improving price levels the demand is likely to pick up steadily.

The management needs to explore other factors that will improve demand. One of them is to undertake market research on people’s desires in terms of units of sales, packaging, and overall quality. It is equally important for managers to seek other price-stabilizing strategies like collective bargaining approaches with other producers (Kohler, 75).

The Euro crisis is a significant determinant of US economic progress directly and indirectly. It is therefore the undisputable fact that this economic slump had a significant disturbance on the American Economy. The extensive foreign trade engagement between US and Europe which has been facilitated by globalization is a big factor that influences the existing dependency of the economic trend in these two regions. Most of the American businesses that are undertaken in parts of Europe especially value creation activities due to the comparative advantage concept have generally been affected since the dwindling economic climate offers confusion in terms of predicting the future (Kohler,75). There has been significant borrowing of capital goods by some Eurozone members like Greece and Cyprus besides foreign direct investment which undermines the economic future of the US in the event of the Euro crisis that hit in 2012. It is therefore advisable that most businessmen study stock market trends very carefully and divest to spread the risk and sustain their profit margin. This would entail seeking other value-creation places like Asia and Africa.

Deciding to outsource input factors is a global debate among various managers. The thorny issue that has been tagged to this is the ethical consideration besides profit maximization. This is generally environmental care and the legal thresholds that are likely to affect the overall performance of the firms in various locations. Overall market demand for the products equally needs to be given in-depth consideration in line with the cultural orientation of the local community as this is an important concept towards sustainable profit maximization goal.