Sustainability in management accounting: Modelling profit forecasting

Abstract

An insight into a mathematical model proposed is given in concept with the hope that both academicians and practitioners will progress in achieving forecast accuracy. The paper also attempts to give explanations for and cost effects of imperfect forecasts, an oversight which frequently occurs to management, a necessity in sustainability. Previous observations through pilot study, postal survey, case study and a follow-up survey form as a basis in formulating the mathematical model (Aziz- Khairulfazi, 2004). We use of probability distribution against point forecasts, the cost function and fundamentals of Bayesian methodology in approach towards sustainable performance. The model explains the use of probability distribution against point forecasts, the cost function and fundamentals of Bayesian methodology in approach towards sustainable performance. The paper will give explanations for and cost effects of imperfect forecasts, an oversight which frequently occurs to management. We relate our findings to the service and manufacturing industries and we include an important input to support our modelling, i.e. feed back issue. We conclude our study by highlighting the use of simple modeling that will benefit business organizations, thereafter influence performance and sustainability, an optiont organizations can also apply. This paper offers an innovative approach and a new flavour in examining an operational framework to a business scenario via profit forecasting model.