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William George is the marketing manager at the Crunchy Cookie Company. Each quarter, he is responsible for submitting a sales forecast to be used in the formulation of the company's master budget. George consistently understates the sales forecast because, as he puts it, "I am reprimanded if actual sales are less than I've projected, and I look like a hero if actual sales exceed my projections."

a. What would you do if you were the marketing manager at the Crunchy Cookie Company?
Would you also understate sales projections? Defend your answer.

b. What measures might be taken by the company to discourage the manipulation of sales
forecasts?

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Understate sales projections?

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If I were the marketing manager, I would strive to my best ability to make as accurate forecasts as possible, based on extensive quantitative and qualitative forecasting techniques. I will definitely not understate sales projections; nor make ambitious projections because these practices can negatively affect the planning process, thereby ...

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Sandeep Bardia, MBA
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  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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