4-Planning Tools & Techniques

PLANNING TOOLS &
TECHNIQUES
Techniques for Assessing the

Environment
Techniques for Allocating Resources
Contemporary Planning Techniques

TECHNIQUES FOR ASSESSING
THE ENVIRONMENT
Environmental
Scanning
Forecasting
Benchmarking
Environmental Scanning
The screening of large amounts of
information to anticipate & interpret
changes in the environment
Reveal issues & concerns that could affect
an organizations current or planned
activities
Competitors intelligence
Environmental scanning activity that seeks
to identify who competitors are, what they
are doing, & how their actions will affect
the organization
Forecasting
Predictions of outcomes
Forecasting Techniques:
Quantitative forecasting
Applies a set of mathematical rules to a series of
past data to predict outcomes
Ex. Time series analysis, Regression models,
Econometric models, Economic indicators,
Substitution effect
Qualitative forecasting
Uses the judgment & opinions of knowledgeable
individuals to predict outcomes
Ex. Jury of opinion, Sales force composition,
Customer Evaluation
Forecasting Effectiveness
The goal of forecasting is to provide
managers with information that will
facilitate decision making
Ways to improve its effectiveness:

1. Use simple forecasting methods
2. Compare forecast with no change
3. Not to rely on a single forecasting method
4. Not to assume that you can accurately
identify turning points in a trend
5. Shorten the length of forecasts to improve
their accuracy
Benchmarking
The search for the best practices
among competitors or
noncompetitors that lead to their
superior performance
Steps: 1. Form a benchmarking
planning team
4. Prepare & implement BEST PRACTISES 2. Gather internal &

action plan external data
3. Analyze data to identify

performance gaps
TECHNIQUES FOR ALLOCATING
RESOURCES
Resources are the assets of the
organization including financial, physical,
human, intangible & structural/cultural.
Techniques:
- Budgeting
- Scheduling
- Breakeven analysis
- Linear programming
Budgeting
A numerical plan for allocating resources to specific
activities (revenues, expenses, large capital
expenditures)
Types:
- Revenue budget projects future sales
- Expense budget lists primary activities & allocates
amount to each
- Profit budget combines revenue & expense
budgets of various units to determine each units
profit contribution
- Cash budget forecast cash on hand & how much
will be needed
- Variable budget takes into account the cost that
vary with volume
- Fixed budget assumes fixed level of sales or
production
Scheduling
Detailing what activities have to be done, the
order in which they are to be completed, who
is to do each, & when they are to be
completed
Devices:
- Gant chart monitor planned & actual
activities over time
- Load chart focus on capacity utilization
- PERT analysis flowchart like diagram
showing the sequence of activities needed
to complete a project & the time or costs
associated with each
PERT Analysis
1. Identifying every significant activity
that must be achieved
2. Determining the order in which
those activities must be completed
3. Diagramming the flow of activities
in a project from start to finish
4. Estimating the time needed
5. Using the network diagram to
determine a schedule
Breakeven Analysis
A technique foe identifying the point
at which total revenue is just
sufficient to cover total cost
BE = TFC / (P VC)
BE : Breakeven point
TFC : Total Fixed Cost
P : Product being sold
VC : Variable Cost per unit
Linear Programming
A mathematical technique that solves

resources allocation problems
CONTEMPORAY PLANNING
TECHNIQUES
Project
management
Scenario Planning
Project Management
The task of getting a projects
activities done on time, within
budget, & according to specifications
Process:
Identify Determine Determine

Estimate Compare
Define activities Establish project additional
time for with
objectives & sequences completion resource
activities objectives
resources date requirements
Scenario Planning
A consistent view of
what the future is
likely to be
ASSIGNMENT
Individual
Youve been hired as a summer intern un the
business intelligence division of McDonaldss
Corp. Your manager has asked you to compile
information on four of the companys most
important competitors. Specifically, shed like you
to find out (1) any new products these
competitors may be introducing; (2) annual sales
& profits for the last 5 years; & (3) other strategic
changes the competitors may be planning.
Determine what 4 competitors youre going to
research. Using the internet, find the desired
information.
Compile the information, by competitor, using a
bulleted list format.
Group
Benchmarking cab be an important
tool & source of information for
managers. It also can be useful to
students. In your group, discuss
study habits that each of you has
found to be effective from your years
of being school. As a group, come up
with a bulleted list of at least eight
suggestions of habits

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PLANNING TOOLS &

Techniques for Assessing the

Contemporary Planning Techniques

Ways to improve its effectiveness:

4. Prepare & implement BEST PRACTISES 2. Gather internal &

3. Analyze data to identify

A mathematical technique that solves

Identify Determine Determine

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