Lecture 3 (Chapter 10)
Planning and Control
There is very thin line between planning and control. Planning is to decide upon the
future of the company, be it goals, targets or anything and controlling is keeping the
operations of the business to the plan or the decisions made for the future. Both
planning and control are based on time. They could either be short, medium or long.
Long-term planning – this involves strategic decisions to be made by the firm and the
long-term objectives. The aggregate of resources to be used are determined and
aggregate demand is forecasted.
Medium-term planning – the decisions are partially disaggregated and objectives are
set in financial and operational terms.
Short-term planning – the decisions are totally disintegrated are based on day-to-day
activities. Steps are taken to correct deviation from the decided plans.
The factors of demand and supply bring uncertainty in planning and control activities.
Supply can be uncertain, as we cannot predict machine failures, human error,
disruptions etc. Demand side’s uncertainty comes from our inability to predict market
trends, behavior or preferences. However, greater uncertainty comes from the demand
side.
There can be two types of demand – Independent and Dependent
PREVIEW SECTION
Planning and Control
There is very thin line between planning and control. Planning is to decide upon the
future of the company, be it goals, targets or anything and controlling is keeping the
operations of the business to the plan or the decisions made for the future. Both
planning and control are based on time. They could either be short, medium or long.
Long-term planning – this involves strategic decisions to be made by the firm and the
long-term objectives. The aggregate of resources to be used are determined and
aggregate demand is forecasted.
Medium-term planning – the decisions are partially disaggregated and objectives are
set in financial and operational terms.
Short-term planning – the decisions are totally disintegrated are based on day-to-day
activities. Steps are taken to correct deviation from the decided plans.
The factors of demand and supply bring uncertainty in planning and control activities.
Supply can be uncertain, as we cannot predict machine failures, human error,
disruptions etc. Demand side’s uncertainty comes from our inability to predict market
trends, behavior or preferences. However, greater uncertainty comes from the demand
side.
There can be two types of demand – Independent and Dependent
PREVIEW SECTION
