Accounting technicians scheme west africa
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| (c) Developing Premises Planning premises are assumptions about the environment in which the plan is to be carried out. Developing planning premises is to establish, circulate, and obtain agreement to utilize critical planning premises such as forecasts, applicable basic policies, and existing company plans. It is important for all the managers involved in planning to agree on the premises. In fact, the major principle of planning premises is this The more thoroughly individuals charged with planning understand and agree to utilize consistent premises, the more coordinated enterprise planning will be. Forecasting is important in developing planning premises. Forecasting seeks to determine What kinds of markets will there be What volumes of sales are there What prices What products What technical developments What costs What wage rates What tax rates and policies What new plants In will political or social environments does the organisation operates in How with the expansion be financed What the long-term trend Because the future is so complex, it would not be profitable or realistic to make assumptions about every detail of the future environment of a plan. Therefore, premises areas a practical matter, limited to assumptions that are critical, or strategic, to a plan that is, those which must influence its operation. (d) Determining Alternative Courses of action The fourth step in planning is to search and examine alternative courses of action, especially those not immediately apparent. There is seldom a plan for which reasonable alternatives do not exist, and quite often an alternative that is not obvious proves to be the best. The more common problem is not that of finding alternatives but reducing the number of alternatives so that the most promising ones maybe analyzed. The planner must usually make a preliminary examination to discover the most fruitful possibilities. (e) Evaluating Alternative Courses of Action After seeking out alternative courses and examining their strong and weak points, the next step is to evaluate the alternatives by weighing them in the light of premises and goals. One course may appear to be more profitable, but it may require a large cash outlay and have a slow payback another may look less profitable but may involve less risk still another may better suit the company’s long-range objectives. If the only objective were to maximize immediate profits in a certain business, if the future were not uncertain, if cash position and capital availability were not worrisome, and if most factors could be reduced to definite data, this evaluation would be relatively easy. 115 But since planners typically encounter many uncertainties, problems of capital shortage, and various intangible factors, evaluation is usually very difficult, even with relatively simple problems. Indeed, it is at this step in the planning process that operations research and mathematical as well as computing techniques have their primary application to the field of management. Download 3.37 Mb. Share with your friends:
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