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Plann Ing and Forecasting PDF
Plann Ing and Forecasting PDF
Plann Ing and Forecasting PDF
Management Functions
Leading
Organizing
Controlling
Foundation of planning
•Mission
•Purpose or Goal
•Objectives
•Strategies
All Customer Driven
Importance/purpose of planning
To provide direction
Reduce Uncertainty
Minimizes waste and redundancy
Sets the standards for controlling
Foundation for planning
Strategic planning | management objectives
MISSION STATEMENT
Resembles a vision statement
Has a more immediate business focus with a time
horizon
Sets forth what the company is attempting to do,
and is usually what the public sees
First step in planning process, what do we want to
do
SWOT ANALYSIS
Strengths,
Weaknesses,
Opportunities and
Threats Analysis
Tool used to analyse
the current status and
success of an
organization
STRENGTHS AND WEAKNESSES
Management
Marketing
Technology
Research
Finances
Systems
OPPORTUNITIES AND THREATS
Customers
Competition
New Technologies
Government Policies
Build on Strengths
Resolve Weaknesses
Exploit Opportunities
Avoid Threats
Mission
Internal External
Strengths Opportunities
ANALYSIS
Internal External
Weaknesses Threats
Strategy
GOALS
Give purpose and direction to accomplish the mission of
an organization
- Answers the questions: “What do we do; why do we do it;
and for whom do we do it?”
- Used as a continual point of reference regarding the scope
or purpose
OBJECTIVES
Further clarify the goal and answer the question how to we
go about it?
STRATEGIES
Statements about the ways the objectives are to be
achieved
Specific
Measurable
Attainable
Realistic
Time-limited
KEY RESULT AREAS:
1. Market Share
Ratio of dollar sales of an enterprise in a particular market to the
total sales of all competitive products and services in that market
2. Innovation
Most successful companies, especially in the areas of technology
were most engineers will work, are continually searching for new
products and services
8.Social Responsibility
Every enterprise has responsibilities as a
corporate citizen that extend beyond the legal
and economic requirements.
1. Both superior and subordinate should have an
understanding of the goals and objectives of the
overall organization and those of the superior’s
group.
2. The superior and subordinate then meet to
establish objectives for the subordinate’s
attention over the next six months or year that
are consistent with group objectives.
3. The subordinate then proceeds, over the ensuing
period to carry out his or her job with an
emphasis on achieving these objectives.
4. At the end of the period, the superior and
subordinate meet again to evaluate the
subordinate’s success in meeting assigned goals.
ADVANTAGES:
Greater commitment and satisfaction on the part of
the subordinates
Enforced planning and prioritizing of future activities
on the part of both superiors and subordinates
More rational method of performance evaluation
based on contribution to organizational objectives
DISADVANTAGES:
Time and paperwork involved
Misuse when superiors simply align rather than
negotiate objectives
Gamesmanship of subordinates who try to negotiate
easy goals
• In Management by Objectives systems at Intel,
objectives are written down for each level of the
organization, and individuals are given specific
aims and targets.
• The principle behind this is to ensure that people
know what the organization is trying to achieve,
what they must do to meet those aims, and how,
as individuals, they are expected to help.
• This presupposes that organization’s programs
and methods have been fully considered.
• If they have not, start by constructing team
objectives and ask team members to share in the
process.
Planning is a continuing
responsibility of every manager.
CONTINGENCY PLANS
Implemented if indicators show a change in
the environment conditions from those on
which mainstream planning is based.
Planning Horizon
asks how far into the
future one should
plan
High technology
products may have
short effective lives,
therefore, short
planning horizon
Complex programs will require not just a
single plan, but a system of plans, each
describing a related activity.
POLICIES
Guides for decision making that permit
implementation of upper-management objectives
with room for interpretation and discretion by
subordinates
PROCEDURES
Prescribed sequence of activities to accomplish a
desired purpose
DELPHI METHOD
Begins with the present state of technology and
extrapolates into the future, assuming some expected
rate of technological progress
CHOICE OF METHOD
Combine a variety of methods to arrive at the best
sales forecast.
Qualitative estimates from the sales force and
customer surveys may be compared against
quantitative estimates
SIMPLE MOVING AVERAGE
Where the values of a parameter show no
clear trend with time, a forecast 𝐹𝑛+1 for the
next period can be taken as the simple
average of some number n of the most recent
actual values of 𝐴𝑡:
WEIGHTED MOVING AVERAGE
The preceding method has the disadvantage
that an earlier value (2008, for example) has
no influence at all, but a value n years in the
past (2009) is weighted as heavily as the
most recent value (2012). We can improve on
our model by assigning a set of weight wt
that a total unity (1.0) to the previous n
values:
EXPONENTIAL SMOOTHING
In this technique, the forecasted value for the
next period 𝐹𝑛+1 is taken as the sum of the
forecasted value Fn for the current period,
plus some fraction α of the difference
between the actual (An ) and forecasted (Fn )
values for the current period.
REGRESSION MODEL
Major class of Explanatory Forecasting Models ,
which attempt to develop logical relationships
that not only provide useful forecasts, but also
identify the causes and factors leading to the
forecast values.
The regression
problem is to
identify a line
D= a + bI
REGRESSION MODEL
REGRESSION MODEL
REGRESSION MODEL
MULTIPLE REGRESSION
The dependent variable D is assumed to be a
function of more than one independent
variable Ij , such that
NORMATIVE TECHNOLOGICAL FORECASTING
One works backward from the future to the
present
A desired future goal is selected, and a
process designed to achieve this goal is
developed.
EXPLORATORY TECHNOLOGICAL
FORECASTING
Delphi Method
S- CURVE
Invention and
innovation | managing
technological change
TECHNOLOGICAL INNOVATION
Introduction into the marketplace of new
products, processes, and services based on
new technology
Reduction of ideas to successful products and
processes is a difficult task
Producing the first successful product is often
not enough; innovation must continue to keep
the product line competitive
Product innovation and improvement must be
a continuing part of technology strategy.
Top Management in technological enterprises must
constantly be aware of the technologies underlying
their business and the potential for change.
One of the most compelling examples of how the
advent of new technology can quickly alter the way
we do business is the birth of the Internet.
To remain competitive, every company experience a
need to establish an entire new group within their
structure and maintain a website, and to provide an
interface between the organization and the rest of the
world.
Many companies also recognized the Internet as an
inexpensive and timely method for keeping their
customers informed.