Chap9

© Prentice Hall, 2005 1 - 1


ObjectivesObjectives1.A complete definition of a plan

2.Insights regarding various dimensions of plans

3.An understanding of various types of plans

4.Insights into why plans fail

5.A knowledge of various planning areas within an organization

6.A definition of forecasting

7.An ability to see the advantages and disadvantages of various methods of sales forecasting

8.A definition of scheduling

9.An understanding of Gantt charts and PERT


Plans: A DefinitionPlans: A DefinitionDimensions of Plans

Repetitiveness

Time

Scope

Level

Types of PlansStanding Plans: Policies, Procedures, and Rules

Single-Use Plans: Programs and Budgets


Plans: A DefinitionPlans: A Definition






Plans: A DefinitionPlans: A DefinitionWhy Plans Fail

1.Corporate planning not integrated into total management system

2.Lack of understanding of different steps of planning process

3.Management has not properly engaged in or contributed to planning activities

4.Responsibility for planning is wrongly vested solely in the planning department

5.Management expects that plans developed will be realized with little effort

6.In starting formal planning, too much is attempted at once

7.Management fails to operate by the plan

8.Financial projections are confused with planning

9.Inadequate inputs are used in planning

10.Management fails to grasp the overall planning process


Plans: A DefinitionPlans: A DefinitionPlanning Areas: Input Planning

Plant Facilities Planning

Weighting process to compare foreign site differences:

1. Deciding on a set of variables critical to obtaining an appropriate site

2. Assigning each variable a weight reflecting its relative importance

3. Ranking alternative sites according to how they reflect these variables






Plans: A DefinitionPlans: A DefinitionPlanning Areas: Input Planning (continued)

Human Resource Planning

Kinds of questions personnel planners should try to answer:

1. What types of people does the organization need to reach its objectives?

2. How many of each type are needed?

3. What steps should the organization take to recruit and select such people?

4. Can present employees be further trained to fill future needed positions?

5. At what rate are employees being lost to other organizations?




Planning ToolsPlanning ToolsForecasting

How Forecasting Works

Insect Control Services forecasts by attempting to:1. Establish relationships between industry sales and national economic and social indicators

2. Determine the impact government restrictions on the use of chemical pesticides will have

3. Evaluate sales growth potential, profitability, resources required, and risks involved

4. Evaluate potential for expansion of marketing efforts in U. S. as well as foreign countries

5. Determine likelihood of technological breakthroughs making existing product lines obsolete

Types of Forecasts


Planning ToolsPlanning ToolsForecasting (continued)

Methods of Sales ForecastingJury of Executive Opinion Method

Delphi method:

Step 1—Experts are asked to answer, independently and in writing, a series of questions

Step 2—A summary of all the answers is then prepared

Step 3—Copies of the summary are given to the individual experts

Step 4—Another summary is made of these modifications

Step 5—Third summary made of opinions and justifications, and copies are again distributed

Step 6—Forecast generated from all of the opinions and justifications that arise from step 5


Planning ToolsPlanning ToolsForecasting (continued)

Methods of Sales Forecasting (continued)Salesforce Estimation Method

Time Series Analysis Method Product Stages

Evaluating Sales Forecasting Methods


Planning ToolsPlanning Tools




Planning ToolsPlanning ToolsScheduling

Gantt ChartsFeatures

1) Summary overview

2) Coordinate organizational resources

3) Establish realistic worker output standards




Planning ToolsPlanning ToolsScheduling (continued)

Program Evaluation and Review Technique (PERT)Defining PERT

Features

Critical Path

Steps in Designing a PERT Network

Step 1—List all the activities/events that must be accomplished and the sequence

Step 2—Determine how much time will be needed to complete each activity/event

Step 3—Design PERT network that reflects all of the information in steps 1 and 2

Step 4—Identify the critical path




Questions

Business

Chap9