Macroeconomic variables
Two more questions from the previous scenario at the bottom
of word document.
Big Drive Auto is a multistate dealer of several
manufacturers’ cars and trucks. They sell the vehicles, service them, sell
parts for repair, and do a significant business in motor oil, coolant, and
replacement tires. Management is always scanning the macroeconomic environment
for signals that will help them better plan their business. Big Drive has been
keeping data on the volume of sales in its various lines of business over the
last ten years. In some cases, like auto and truck sales, it tracks the numbers
of units sold. In other cases, it uses constant dollar sales. The following
tables report Big Drive’s sales in all of its multistate locations since 1998.
Table 1.
Vehicle Unit Sales (thousands)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
139 160 145 133 154 167 165 161 160 163
Table 2.
Motor Oil, Coolant, Tires (thousands of constant dollars)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
2,096 2,064 2,150 1,978 1,935 1,980 1,956 2,000 2,020 2,050
Table 3.
Service Revenue (thousands of constant dollars)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
5,915 6,111 6,300 6,490 6,716 6,897 7,118 7,317 7,500 7,650
In addition to sales data, Big Drive Auto collects data on
the prices it charges customers. Following are the data since 1998:
Table 4.
Index of Sales Prices for Vehicles: Year 2000=100
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
98.0 99.2 100 99.0 97.0 96.8 98.0 97.2 98.5 99.0
Table 5.
Index of Sales Prices for Motor Oil, Coolant, Tires: Year
2000=100
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
100.5 100 100.1 102.0 102.9 106.0 111.2 116.9 118.5 119.0
Table 6.
Index of Sales Prices for Auto and Truck Services: Year
2000=100
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
97.5 98.8 100 100.4 102.0 104.1 105.8 107.7 109.2 110.4
The source for the U.S. government macroeconomic data that
correspond to company data can be found in the industry detail of the GDP
accounts as reported by the Bureau of Economic Analysis. They give data for
both GDP quantity indexes by industry, as well as the price indexes by industry
used to convert the nominal data into the quantity data. Industry detail tables
with data going back to 1998 can be found at
http://www.bea.gov/Industry/Index.htm. Click on the link for Interactive Tables
of the Gross Domestic Product by Industry. The tables can be found in the Gross
Output by Industry section. The Bureau of Economic Analysis Web page may change
locations periodically. If this is the case, you will be able to locate the information
using a search engine (such as Google) and the phrase, GDP by Industry.
QUESTIONS
1. Explain
how specific planning and operating decisions at the organization can be
improved using the macroeconomic data.
2. How would
you get reliable forecasts of these macroeconomic variables?
