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Show How a Food Manufacturing Company's Forecast would be Affected by the Following Unexpected Events:


a) a high degree of inflation- all raw materials and other expenses will increase. So in reality cash-out is bigger than in forecast, if firm does not increase its price according to the inflation, then profit will be smaller than forecasted.

b. a poor summer- they will get less food, so their sales will be less. It might also happen that due to poor summer the price of food increases and so the sales will not decrease.

c. the introduction of synthetic foods- less people will buy normal food, so the sales will be less than forecasted.

d. a rise in interest rates- if they had a loan, then their expenses will be more than forecasted.

e. enforsed closure of all factories for 3 days a week- their sales will be less than forecasted as well as variable costs, but fixed costs will remain the same so profit will be less that forecasted.

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