Planning Techniques and Tools

1. Management
Planning Techniques and Tools

2. Plan:-
Documents that outline how goals are
going to be met.
Planning:-
Management function that involves
setting goals, establishing strategies for
achieving those goals, and developing plans
to integrate and coordinate work activities.

3. Why Planning is important?
1.Planning provides direction to managers and
Non-managers alike.
2.Planning reduces uncertainty.
3.Planning minimizes waste and redundancy.
4.Planning establishes the goals or standards.

4. Planning Techniques:-
There are three basics techniques for planning.
 Techniques for Assessing the Environment
1) Environmental Scanning
2) Forecasting
3) Benchmarking
 Techniques for Allocating Resources
1) Budgeting
2) Scheduling
3) Breakeven analysis
4) Linear Programming
 Contemporary Planning Techniques
1) Project Management
2) Scenario Planning

5. Techniques for Allocating Resources
Resources:-
“An organization’s assets-including
financial, physics, human, intangible, and
structure-that are used to develop, manufacture,
and deliver products to its customers.”
 How Can managers allocate these resources effectively and
efficiently so that organizational goals are met?
Managers choose from a number of techniques for
allocating resources, we will discuss only one Technique here which
is budgeting.

6. Budget:-
“A budget is a numerical plan for allocating
resources to specific activates.”
OR
“An amount of money available for spending
that is based on plan how it will be spent.”
 Managers typically prepare budget for revenues,
expenses, and large capital expenditures such as
equipment.

7. Budgeting:-
“It is a process in which a number of
activities performed in order to prepare a
budget.”
“Process of expressing quantified resource
requirements( amount of capital, material,
number of people) into time phased.”
OR

8. Why budgeting is important:-
Budgeting is a critically important part of the business
planning process.
• Forecast of income and expenditure:
• Business owner and managers need to be able to predict whether a business will make a profit or
not.
• To provide a model of how the business might perform, if certain strategies, events, plans are carried out.
• Tool for decision making
• The purpose of budgeting is to provide a financial framework for the decision making process.
• Monitoring business performance
• The purpose of budgeting is to enable the actual business performance to be measured against the
forecast business performance.
• Plan for Future Growth
• Companies often use budgets to plan for future business growth and expansion.
• Facts
• Budgets usually represent a detailed analysis of how a company expects to spend money in future
time periods.

9. Important of Budgeting:-
• Organizational Success
• Effective budgeting system is a key to organizational success.
Effective budgeting System is a great way to successfully attain the
business goals and objectives having been quantified and clearly stated.

10. Types of Budgets:-
There are two types of budgets prepared in cost accounting.
Fixed or Static budget
Revenue budget
Expense budget
Flexible or Variable budget
Cash budget
Profit budget

11.  Fixed or Static Budget:-
“It refers to an estimate of pre-determined incomes and
expenditures, which once prepared, doesn’t change with the
variations in the activity levels achieved.”
Flexible or Variable Budget:-
“Flexible budget is a financial plan created for different activity
levels. It can be freely adjusted on the basis of output produced.”
OR
“Takes into account the costs that vary with volume.”

12. Types of Fixed budget:
 Revenue Budget:-
“It is forecasts of a company’s sales revenues and expenditures, including
capital- related expenditures.”
OR
“Projects future sales.”
 Expense budget:-
“ It is forecasts all of the elements of a business ‘operating expense, such as
salaries, rent, depreciation, and others.”
OR
“ Lists primary activities and allocates dollar amount to each.”

13. Types of Flexible budget:
 Cash Budget:-
“A cash budget is an estimate of the cash-flow of an individual or
company over a specific period of time to determine whether cash is being
spent productively.”
OR
“ Forecasts cash on hand and how much will be needed.”
Profit Budget:-
“Combines revenue and expense budgets of various units to
determine each unit’s profits contribution.”

14. Comparison chart:-
BASIS FOR COMPARISON FIXED BUDGET FLEXIBLE BUDGET
Meaning
The budget designed to
remain constant, regardless
of the activity reached.
The budget designed to
change with the change in
the activity levels.
Nature Static Dynamic
Activity Level Only one Multiple
Performance
Evaluation
Comparison bw actual and
budgeted levels cannot be
done accurately, If there is
a distinction in their activity
levels.
It provides a good base for
making a comparison
between the actual and
budgeted levels.
Rigidity
Fixed Budget cannot be
modified as per the actual
volume.
Flexible budget can be
easily modified in
accordance with the activity
level attained.
Estimates Based on assumption Realistic and Practical

15. Thanks of
Mam.
Wardah
Akram
The
Style
of
Nature

16. Flower
Natural
The
Thanksof:-

17. I see a beautiful dream like that