International Paper - Essay Example

Specific Planning and Operating Decision using Macroeconomic data: The working and success of any business does not depend only on its own particularmarket or even the decisions that are made within the organization, but are also very dependent on the macroeconomic environment in which the organization operates (Sloman & Sutcliffe, 2004). An organization is directly affected by the economy of the country. Organizations and managers require having a clear understanding of the macroeconomics and the four major objectives of macroeconomics.

Macroeconomic data can be broadly classified into four main heads, namely the economic growth, unemployment, inflation and balance of payments. Any changes in these factors of the economy can lead to the company’s planning to be affected to a great extent. Thus when an organization like Big Drive Auto requires making any specific decision or plan, like increasing the prices for fuel or the vehicles themselves, then it is essential that macro economic data is well taken into consideration. This will allow the company to rightly understand the total variation in the economic market of the country and this allows for the pricing to be more appropriate and allows the company to make higher profits.

Thus the operations and the planning become more apt for the organization in terms of the whole economy of the country.Reliability of Forecasts:There has been a strong focus on the reliability of the forecasts in terms of the macroeconomic variables. The major problems that have been noted are the ability to relate to the balance between the aggregate demand and the aggregate supply. Thus to ensure complete reliability of the macroeconomic variables, it is essential to place a focus on the balance of the aggregate demand and the aggregate supply.

This can be the demand side policy which generally seeks to influence the level of spending in the economy and the supply side policy which mainly directly influence the level of production.Uncertainty of Macroeconomic Forecasts:There are a number of uncertainties that are faced by companies in terms of the macroeconomic forecast. In recent researches there has been a clear that the private sector tends to face issues which are related to the rational bias. The uncertainty of the macroeconomics forecasts can be dealt with, by a thorough study and understanding of the various prices of the number of units sold across different locations.

This however requires to be analyzed by choosing a wide range of locations and over a number of years. Also as the value of oil and coolants are affected by the economic condition of the country, hence a focus should be made on the economic policy of the government as this would allow a better pricing policy and a better focused plan for both the operations as well as the prices. A detailed understanding of the changes over the years and locations will allow for clear and more stabilized forecasts.

This will allow create a balance which will thereby allow for better and more solid planning within the organization.