Thursday, October 14, 2010

Section 2.3.2 summary including the influence chart.

Transferring an income statement into an influence chart can be pretty straight forward if numbers are involved.  The numbers would build upon the influence chart without much thought or creativity from the modeler.  In other words, the variables for the influence chart would already be determined and the modeler would be left with just plugging in the numbers.  Figure 2.4 on page 30 of the text book shows an influence chart in which the relationships are perfect for an influence chart that shows the historical performance of a company but if we needed to make projections for the future then this chart reveals no critical information without numbers.  In its current design, this influence chart could not provide a good model.  In my opinion, this influence chart makes a great overview of a future model and should help the novice and expert come up with all of the necessary questions to build the model needed to determine the outcome one seeks. 

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