Demand Forecasts and Scenarios

For this proposal, three scenarios were analyzed in terms of future demand and financial impacts. The baseline "Scenario I" assumed that the new line would ^ successful. "Scenario 11" assumed the lapanese would soon follow and compete successfully with Big Red in this line. "Scenario III" assumed that the new ''ie was a failure. The sales volume forecasts under these three scenarios are shown in Table 1.

There was, however, not a lot of confidence in any these forecasts. In the preceding few years lapan had become a formidable competitor, not only in

CASE 321 Table 1 Demand Forecasts (000s engines)*

Year

Baseline 1

Scenario II

Scenario III

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