Chapter 9
Planning Tools
Planning is better when the information is better!
Managers must perform the following techniques to get better information:
1. Boundary spanning
2. Competitor intelligence
Forecasting
Boundary spanning provides the basis for forecasting
-Forecasts are predictions of outcomes
-Technological Forecasts
-Revenue Forecasts
-Forecasts tend to be more reliable in more stable environments
Qualitative forecasts
Quantitative forecasts
Benchmarking
-Investigating the market for the best service, product, or process and then copy
implement the benchmark in your company.
Budgets-Numerical plan for allocating resource
Revenue budgets- Predicts future sales
Expense budgets-allocation of money to the primary units
Profit budgets-revenue and expense budgets together
Cash Budgets
Capital Budgets
Operational Planning
Scheduling-Listing the necessary tasks to be performed in the order that they need to be
performed with the appropriate number of
resources.
Gantt Chart- Henry Gantt- Bars use to show projects and time
frames.
Load Chart-Plan for departments and maximum capacity permitted
PERT charts- A technique use to plan and schedule complicated projects
-Critical path- longest time permitted for activities
Break even analysis
The point where revenues cover costs.
Queuing Theory
Analyzing the cost of having a wait vs. increasing the service to
eliminate the wait.
This techniques helps to test the patience of customers
Probability Theory
Statistics are used to review the past to help with the future.
Marginal Analysis
Reviews incremental costs rather then average cost
What will it cost to serve one additional customer. What is the revenue from one
additional customer. The additional cost is compared to additional revenue. (Looking at
the margin)
Simulation- Create a model of the real work-