WEEK 2
CHAPTER 5
DISCUSSION QUESTION 10
What is the advantage of using a composite of indicators (such as the 10 leading indicators) over simply using an individual indicator?
A composite indicator is an aggregated index comprising individual performance indicators. “It is a useful tool for conveying summary performance information and signaling policy priorities and are used widely in health care and other sectors, nationally and internationally.” (Jacobs, Smith, & Goddard, 2004) Some of the advantages of using a composite of indicators over an individual indicator includes; help in identifying divisions, departments or areas which are lacking in performance, helps in a more precise future forecasting of events, helps in developing a more effective approach and also helps better comparability and understanding.
DISCUSSION QUESTION 12
Comment on whether each of the following three industries is sensitive to the business cycle. If it is sensitive, does it do better in a boom period or a recession?
a. Automobiles-
b. Pharmaceuticals
c. Housing
a) Automobiles (yes) are sensitive because it all depends on the type of product and the demand for it. There tend to be huge sales at the end of the year to attract business; for instance during a recession there is little to no demand for automobiles even with major discounts.
b) Pharmaceuticals (no) are not sensitive because the demand and supply does not change it stays constant even through a recession and price changes.
c) Housing (yes) the housing industry is very dependent on the economic conditions which makes it cyclical. During a recession home prices tend to drop and so does sales.

CHAPTER 6
DISCUSSION QUESTION 2
List the five stages of the industry life cycle. How does the pattern of cash dividend payments change over the cycle? (A general statement is all that is required.)
The five stages of