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• 'Flight by machines heavier than air is unpractical and insignificant, if not impossible' (Simon Newcombe, 1901). Eighteen months later the Wright brothers flew.

• 'My imagination refuses to see any sort of submarine doing anything but suffocating its crew and foundering at sea' (II. G. Wells, 1902).

• 'Airplanes are interesting toys, but of no military value' (France's Marshal Foch, 1911).

• 'The energy produced by the breaking down of the atom is a very poor kind of thing. Anyone who expects a source of power from the transformation is talking moonshine' (Ernest Rutherford, 1919, after he had split the first atom).

• 'I think there's a world market for about five computers' (Thomas J. Watson, IBM Chairman, 1943).

• 'By 1980, all power (electric, atomic, solar) is likely to be virtually costless' (Henry Luce, founder and publisher of Time, Life and Fortune, 1956).

• 'With over 50 foreign cars already on sale here, the Japanese auto industry isn't likely to carve out a big slice of the US market for itself (Business Week, 1958).

Entertainment

• 'If Beethoven's 7th Symphony is not by some means abridged, it will soon fall into disuse' (Philip Hale, nineteenth-century music eritic).

• 'Can't act, can't sing, slightly bald. Can dance a littie' (comments after Fred As take's first movie audition).

• 'TV won't be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night' (Daryl K Zanuck, head of 20th Century Fox, 1946).

• '[He] is an unspeakably untalented and vulgar young entertainer. Where do you go from Elvis Presley, short of obscenity -which is against the law' (John Crosby, syndicated TV critic, 1954).

• 'We don't like their sound. Groups of guitars are on the way out' (Decca Recording Company, 1962. when turning down the Beatles). The Beatles were also rejected by Pyc, Columbia and HMV before signing with EMI.

• 'The singer [Mick Jaggerj will have to go; die BBC won't like him' (Eric Easton's suggestion to the Rolling Stones).

• 'Unsinkable' (claim made by the Titanic's builders, Harland and Wolff, in 1912, for the ship that cost $7.5 million to build).

• 'James Cameron has spent S200 million on a movie and it's a dog. He's finally had it!' (quote repeated by film critie Adam Smith, referring to the blockbuster film Titanic).

Environment

• 'Since populations tend to increase geometrically [1, 2, 4, 8...] and food supply arithmetically [1, 2, 3, 4...], the starvation of Great Britain is inevitable and imminent' (Thomas Robert Mai thus, 1798).

• 'The battle to feed humanity is over. In the 1970s the World will undergo famine -hundreds of millions of people are going to starve to death' (Paul Ehrlich, environmentalist author, in the 1970s).

• 'Population will soon outstrip food production' (Lester Brown of the Worldwatch Institute, 1973).

• 'Population will increase faster than world food production, so food prices will rise between 35% and 115% by 2000' (Global 2000, report to the President of the United States).

• 'American oil reserves will last 10 years' (United States Bureau of Mines, 1914).

• 'American oil reserves will last 13 years' (United States Bureau of Mines, 1939).

• 'American oil reserves will last 13 years' (United States Bureau of Mines, 1951).

• 'We could use up all of the proven reserves of oil in the entire world by the end of the next decade' (Club of Rome, 1972). They also made similar predictions for the reserves of aluminium, copper, lead, natural gas, silver, tin and zinc.

The results so far: known oil reserves are over

1,000 billion barrels, supplies have pushed metals, mineral and food prices down 40% since

1960, and calories consumed per capita in the

Third World are 27% higher than in the 1960s!

SOURCES: 'Sometimes expert, opinion isn't ¡ill it should be', Go fSeptember-©£tober 19S5), p. 2; Terry Coleman, The Liners (1 larinondsworth: Penguin, 1976); Stephen Pile, The Book of Hemic Failures (London: flitura, 1980); Charles Gillett, The Sound of the City: The rise of rock and roll (London: Souvenir. 1983); 'Environmental scares: plenty of gloom', The Economist (20 December 1997); Encarta: Multimedia encychipacdia (Microsoft, 1997).

pattern of sales movements within the year. The term season describes any recurrent hourly, weeldy, monthly or quarterly sales pattern. The seasonal component may relate to weather factors, holidays and trade customs. The seasonal pattern provides a norm for forecasting short-range sales. Finally, erratic events include fads, strikes, snow storms, earthquakes, riots, fires and other disturbances. These components, by definition, are unpredictable and should be removed from past data to see the more normal behaviour of sales.

Suppose an insurance company sells 12,000 new life insurance policies this year and wants to predict next year's December sales. The long-term trend shows a 5 per cent sales growth rate per year. This information alone suggests sales next year of 12,600 (= 12,000 x 1.05). However, a business recession is expected next year, which will probably result in total sales achieving only 90 per cent of the expected trend-adjusted sales. Sales next year are therefore more likely to be 11,340 (= 12,600 x 0.90). If sales were the same each month, monthly sales would be 945 (= 11.340/12). However, December is an above-average month for insurance policy sales, with a seasonal index standing at 1.30. Therefore December sales may be as high as 1,228.5 {= 945 x 1.3). The company expects no erratic events, such as strikes or new insurance regulations. Thus it estimates new policy sales next December at 1,228.5 policies.

leading indicators Time series that change in the same direction but in advance tif company sales.

Leading Indicators

Many companies try to forecast their sales by finding one or more leading indicators: chat is, other time series that change in the same direction b.ut ahead of company sales. For example, a plumbing supply company might find that its sales lag behind the housing starts index by about four months. An index of housing starts would then be a useful leading indicator.

statistical demand analysis

A set of statistical procedures used to discover the most important real factors {.tffectiri[> sales and their relative influence; the most commonly analyzed factors are prices, income, population and promotion.

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