Elasticity

Johnson and Johnson is a company that has been around for more than 125 years now with a stable profit margin around 70% each year. For Johnson and Johnson is a company that not only produces seasonal products, but also household items we use each day. I would prefer to use a Growth Trend Analysis, since their sales change by a constant proportional amount each year. In order to complete the forecasting for Johnson and Johnson I would need the years that they are looking to forecast, the sales revenue over those years, furthermore; I would then be able to calculate the natural log and log of those numbers as well as the time period in order to solve the equation. The issue with the growth trend analysis is that with this method it cannot predict cyclical turning points in the economy, like in 2008 when the economy crash and so did Johnson and Johnson stock. As of 2010 Johnson and Johnson was still working on rebuilding from 2008, which this growth trend analysis would not have captured. Also with using this method one has to understand that at one point in the future Johnson and Johnson will not be able to maintain this constant growth and at that point this method will be hard to implement.

Another method I would also look into would be Qualitative analyses. I would normally not go with this type of analyses, but with Johnson and Johnson consistent rate of grow of the decade I believe that this too would help place them in a good direction for the future that could be later back up using the Growth Trend Analysis or even another type of trend analysis. Johnson and Johnson is a company that could benefit from the Survey Techniques that could be mailed to customers, or even vendors they would like to carry their product, which I would think for a company a successful they have implemented this forecasting model already, because we all know we have seen ads or received something in the mail from Johnson and Johnson before asking our opinion on a product or a...