The following appeared as part of the business plan of an investment and financial consulting

firm:

"Studies suggest that an average coffee drinker's consumption of coffee increases with age, from
age 10 through age 60. Even after age 60, coffee consumption remains high. The average cola
drinker's consumption of cola, however, declines with increasing age. Both of these trends have
remained stable for the past 40 years. Given that the number of older adults will significantly
increase as the population ages over the next 20 years, it follows that the demand for coffee will
increase and the demand for cola will decrease during this period. We should, therefore,
consider transferring our investments from Cola Loca to Early Bird Coffee."

The Business Plan suggests that an average coffee drinker's consumption of

coffee increases with age, from age 10 through age 60. Even after age 60, coffee
consumption remains high. The average cola drinker's consumption of cola,
however, declines with increasing age. These trends have remained stable for
the past 40 years. Given that the number of older adults will significantly
increase as the population ages over the next 20 years, it follows that the
demand for coffee will increase and the demand for cola will decrease during
this period. The Firms plan to shift the investments from Cola Loca to Early
Bird Coffee based on these facts is flawed.

Firstly, the business plan provides general facts which are not backed by
statistical data. It talks about the shift and its relation with the age with the
consumption of coffee and cola and readily applies general facts with their
business model. Though the trend has remained stable for past 40 years the
prediction based on these facts may not hold true that the same trend will
continue in the coming years.

Secondly it just talks about the consumption but does not talks about other
factors that affects the buying behaviour of an individual. The factors such as
Price, Income level, Health issues etc which plays an important role in purchase
and also determines their buying behaviour and future trends is not stated in the
plan.

Thirdly, the prediction that the number of old people will increase over the next
twenty years is flawed because the increase is based upon the rate at which
population is increasing and not only the number of old people will increase but
also the number of children will increase which screen out the other
possibilities.
Finally without the above stated information, the plans remains questionable
and doubtful in terms of its application.