MemberSeptember 4, 2021 at 10:59 am
Absolutely! Inexcusable from someone who would claim to making decisions based on data.
I pulled the data and used a computer to do the calc this time. This is a chart of the data for U.S. Sales for the 9 years of production of the Honda Insight, Gen 1. The trend line is not a good fit to the data (R2 of .36) and with a sample size of only 9 the Mean and Standardization are all over the place. Worthless actually because it is not a normal distribution and didn’t want to take the time to transform it.
I am sure Honda changed their production capacity after seeing demand far below the capacity after a couple of year but can’t find numbers on it.
The point of course, is that demand determines the production rate not the production plan or capacity. In this case, with a new and innovative product at the time, Honda’s demand projections were way to optimistic and they over planned production. Not as big of a deal for Honda, but for a start up with limited capital, could be catastrophic.
I think, with COVID, and chip shortage no analysis using historical data will be valid or reliable thus extra caution advised if “Drinking the coolaid”