DFK! wrote:
Aizle wrote:
But all estimates, even good educated ones are at the end of the day still a guess.
No they're not, they're estimates.
I have a business. We've been around for a hundred years, and in our first year we sold one thousand widgets. Every year we've sold one thousand more widgets than last year. Linear growth. I project or
estimate that next year I'm going to sell one thousand more widgets than last year, based on my previous trend.
Your theory: Instead, I sell five hundred more, a difference in my
estimate of 50%. I have 500 left that I've paid for, it's no big deal though, because it was just a guess that I made.
Reality: Instead, I sell five hundred more, a difference in my
estimate of 50%. I have 500 left that I've paid for, and so now I have serious cash flow issues and may need to lay people off because I had only planned on having 0 left.
Way to miss the point.
Sure if you've had a hundred years of data, and have had a consistent linear growth, you're going to be able to make a pretty damn good guess at what next years sales will be.
However, you're STILL guessing at the future. The world economy could tank, a gas main could blow up your business, a new competitor could come on the market. All potentially affecting your sales figures and the reality of what happens.
Your scenario also appears to assume knowledge of all the data elements as well, which I'll tell you in the real world doesn't happen all that often. So you have to make assumptions, and sometimes those assumptions are wrong or only capture part of the picture.
Bottom line is that reality rarely works out as neatly as stuff looks on paper.