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PLANNING TECHNIQUES AND TOOLS
Transcript of PLANNING TECHNIQUES AND TOOLS
*This is an attempt to foretell or predict future trends, events, or conditions from known data and to prepare for the expected changes in business or industry.
*Under this technique, past and present or current information is used to predict future events or conditions.
*The survey method involves probing the customer or respondent through questionnaires or interviews.
*Under this method, the future is predicted by projected trends using past data on information. This method brings out a relationship between sales and time.
* The use of econometric models is another method of forecasting.
Break-even charts are used for planning purposes. The mechanics of break-even charts are discussed in the chapter dealing with control function. Almost every manager makes a profit plan and break-even analysis is useful for developing it. A break-even point, that is, the point at which total cost equal to total revenue, can be determined. Using these charts, a manager can say whether the company can sell enough products to breakeven and plan accordingly.
This is the term used for planning time for various activities in an organization.
Two basic concepts in these two techniques are: events and activities, an event is an identifiable accomplishments that occurs at a definite point in time. Activities are the work required to complete the event. Events show the beginning and end of an activity.
Thus, the four basic steps in developing PERT are:
1. Identify and list major tasks in a project.
2. Determine the order in which these task must be carried out, in terms of which one comes first, second, and so on and which activities can be carried out simultaneously.
3.Figure out a pessimistic, probable or most likely, and optimistic times for each activity or task.
4. Draw a PERT network showing the sequence and times.
The advantage of these techniques is that they focus the manager to engage in planning, identifying critical areas and correcting them. Manager will be able to monitor those activities most critical to the successful completion of a project.
MANAGEMENT BY OBJECTIVES
Peter Drucker used this term in 1954 and applied it t an approach to planning. MBO drawn a great deal of attention among the academics and practitioners.
MBO is an approach to management designed to encourage initiative and prevent working at cross-purposes, or indeed, for no purpose at all. It is a way to help managers accomplish their job within the framework of organization needs and resources.
PLANNING TECHNIQUES AND TOOLS
BASIC STEPS IN BUSINESS PLANNING