Economic forecasts: business executives' never-ending search for reliable economics

Article Abstract:

A consulting service called the Systems Dynamics Group was initiated by Jay W. Forrester (professor at the Sloan School of Management at MIT) and is now used by many corporations for economic forecasting. Forrester used a high-speed computer to analyze economic and social interactions and to synthesize the results. According to the computer results, obvious decisions made in good faith by companies or governments often exacerbate the problems. Decisions that are likely to promote success include: realistic pricing to ensure continued development and balancing of inventory, production capacity, and backlog. Forrester and a former student, Nathaniel J. Mass, constructed a model called the National Model for synthesizing the economy. This model is not an econometric model but is based on orders and decisions, rather than investment levels. The model predicts an impending depression, similar to that of the 1930s. Nathaniel Mass, disturbed by the depression prediction, established his own consulting company and developed a more complete model of the economy (the U.S. Model).

Analysis, Forecasts and trends, Economic development, Executives, Economic forecasting

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Interest-free capital

Article Abstract:

To get interest-free capital out of accounts receivable, one must focus management action on credit practices, collection procedures, and billing procedures to affect customer behavior. Methods for inducing customers to agree to pay reasonably as agreed include issuing invoices the same day goods are shipped, describing clearly the terms of sale, discount, and net amount due on the invoice, cooperation from top management in reducing accounts receivable, and applying a late charge for payments that are unreasonably late. When these policies are enforced, eight out of ten customers pay at a reasonable time after billing. Better collection procedures can also help improve accounts receivable.

Methods, Cash management, Capital, Accounts receivable

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Frederick Joseph: why capital structure may never be the same - and shouldn't be

Article Abstract:

G. Chris Andersen, managing director of Drexel Burnham Lambert Inc. (whose CEO is Frederick H. Joseph), believes that shifts between debt and equity are necessary when the market warrants it. Thus, capital structure should be driven by the market and balance sheets should be restructured according to changing market and operating conditions. An interview is also given on Joseph's opinions on capitalization structure and debt-equity ratios.

Investment banks, Investment advisers, Chief executive officers, interview, Joseph, Frederick, Drexel Burnham Lambert Inc.

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