Abstract

This article focuses on the wide fluctuations in the demand for machine tools that have led many to despair of predicting quality and quantity demands. The sale of machine tools has, for several decades, exhibited remarkable cyclical swings, leading to a widely held belief in the industry that the annual demand for machine tools is virtually impossible to analyze and predict. The demand for machine tools, like the demand for many other types of capital goods, can be expressed as a function of three factors: a demographic factor, a buying power factor, and a price factor. These factors may be expressed and combined in various ways, depending upon the economics of the underlying demand situation and the judgment of the analyst. The graphic method has often been recommended by statisticians and econometricians as a convenient means for facilitating preliminary analyses of data before undertaking more vigorous mathematical analyses.