Post on 01-Nov-2014
description
FINANCE: PREDICTION OF THE FUTUREContemporary Quantitative and Non-quantitative Trends
2013-03-06
Mykhajlo Kolisnyk,Senior Fellow, Kyiv School of Economics
Partner, Strategy Institute inspira $
Kyiv School of Economicsfounded by EERC and the Victor Pinchuk Foundation
«Contemporary Economics looks like a chess game. You only can win if you are predicting more steps ahead than your competitor»
Unknown
Frontal Lobe – area responsible for long-run
decisions, planning, reasoning and consequences analysis
MRT
Deep Limbic System –area responsible for our
dreams, illusions pleasure and …
operations planning partMRT
Bad News for Long-Run Planners
http://biology.about.com/od/humananatomybiology/a/anatomybrain.htm
Frontal Lobe – area responsible for long-run
decisions, planning, reasoning and consequences analysis
MRT
Deep Limbic System –area responsible for our
dreams, illusions pleasure and …
operations planning partMRT
Bad News for Long-Run Planners
http://biology.about.com/od/humananatomybiology/a/anatomybrain.htm
Frontal Lobe – area responsible for long-run
decisions, planning, reasoning and consequences analysis
MRT
Deep Limbic System –area responsible for our
dreams, illusions pleasure and …
operations planning partMRT
Bad News for Long-Run Planners
In according to MRT investigation our Frontal Lobe take part in planning processes that not exceeds 1 month
Taleb, JacobsDeep Limbic System takes active part in decisions withconsequences more long than 1 month period
Frontal Lobe – area responsible for long-run
decisions, planning, reasoning and consequences analysis
MRT
Deep Limbic System –area responsible for our
dreams, illusions pleasure and …
operations planning partMRT
Bad News for Long-Run Planners
In according to MRT investigation our Frontal Lobe take part in planning processes that not exceeds 1 month
Taleb, JacobsDeep Limbic System takes active part in decisions withconsequences more long than 1 month period
Emotional (Alternative) Approach to Forecasting and Decision-making
Charles S. Jacobs «Management Rewired»
• We have our world in our head only, perceptions of people mostly differ
• Our thinking are subjective• Emotionally based decisions are better than calculated• Feedback kills motivation
http://www.digest.kyivstar.ua/books/736/
Nassim Nicholas Taleb‘Black Swan’
• Past experience always constrained our further development
• We cannot predict ‘black swans’• Do not use maps instead of real landscape
http://www.digest.kyivstar.ua/books/32/review/
It looks that traditional forecasting and analytical methods do not work at all?
No, we still can use simplest forecasting and analytical tools to predict ordinary company activity
We will not predict ‘black swans’, we still need to learn how to live with this fact but we can use a forecasts and badly need to use analytics in our management activity
The researchers will improve a quality of models in order to fit contemporary needs
Quantitative (Traditional) Approach to Forecasting and Decision-making
Sales Forecasting and
Budgeting
Sal
es V
olum
e
Time
Probability
Forecast Fact
Sales Growth
Quantitative (Traditional) Approach to Forecasting and Decision-making
Inventory Planning –
Classical EOQ Approach
Quantitative (Traditional) Approach to Forecasting and Decision-making
Contribution Margin Analysis for Company SCU’s
Product AlfaProduct
Beta
Product Gamma
CMR – delta CMR Matrix
Con
tribu
tion
Mar
gin
Rat
e C
MR
Product Contribution Margin to Total Contribution Margin - delta CMR
Quantitative (Traditional) Approach to Forecasting
and Decision-making
Portfolio Analysis –Markowitz
Model 3D View 3 assets
We need to have a wisdom to accept both
Traditional Approach
vs.Alternative Approach
A fractal is a mathematical set that has a fractal dimension that usually exceeds its topological dimension[1] and may fall between the integers.[2]
Fractals are typically self-similar patterns, where self-similar means they are "the same from near as from far
Wiki
It is expected, thatFractal Mathematics, in the nearest future helps us to join Traditional and Alternative Approaches
Good News for Long-Run Planners
http://biology.about.com/od/humananatomybiology/a/anatomybrain.htm
Right Part of Human Brains –area responsible for our intuition
MRT
Even our intuition in the nearest future become a target of quantitative modeling, probably, on the base of Fractal Math
We are at the edge of these changes !
THANK YOU!(067) 230 01 05kolisnyk@kse.org.uakolisnyk@inspira.in.uainspira.in.ua Copyright © 2013 kolisnyk