1. Planning

2. Planning
Planning means looking ahead and chalking out future courses of action to be followed.
“Well plan is half done”.
According to Koontz & O’Donell, “Planning is deciding in advance what to do, how to do and who is to do it.

3. Reasons for Planning

4. Steps in Planning Function
Assumptions about the lively shape of events in future.
Establishment of objectives
Establishment of Planning Premises
Choice of alternative course of action
Follow up/Appraisal of plans
Formulation of derivative plans
Securing Co-operation

5. Establishment of Objectives
Objectives: SMART
Goals: Go, Qualitative
Targets:

6. Establishment of Planning Premises:
Internal
Capital Investment Policy
Labor Management Relationships
External
PEST
LDG

7. Planning premises: Material, Machine, Money, M. Strategy, PEST
Goodwill. Morale, Attitude, PR
Union Management Relationships

8. Choice of alternative course of action:
Choice of alternatives based In light with
Resource available
Risk
Effort required
Selecting from alternatives :
Experience
R & D
Experimentation
Collective decision making

9. Formulation of derivative Plan:
Sub Plans
Securing Co-Operation:
Subordinate May feel motivated, Valuable Suggestions, Improvement
Follow Up:
Appraise its effectiveness received from departments

10. Decision Making: “Decision-making involves
The selection of a course of action
From among two or more possible alternatives
In order to arrive at a solution for a given problem”.

11. Types of Decision Making
Policy decisions
Tactical and routine decisions: policy, rules and procedure

12. Decision Making Process
Defining and analyzing the problem
Gathering information and collecting data
Developing and weighing the options
Choosing best possible option
Plan and execute
Take follow up action

13. Defining and analyzing the problem
The nature of the problem and decision to be taken?
The impact of the decision to be taken?
The strategic factor limiting to the decision

14. Techniques of Decision Making
Marginal Cost Analysis
Cost Benefit Analysis
Operational research
Linear programing
Network Analysis

15. Cascading of Objectives

16. Elements of MBO Goal specificity Participative decision making
Explicit time period for performance
Performance feedback

17. “Prediction is very difficult, especially if it's about the future.”
Forecasting
“Prediction is very difficult,
especially if it's about the future.”
Nils Bohr

19. What is forecasting? Forecasting is a tool used for predicting
future demand based on
past demand information.

20. Why is forecasting important?
Demand for products and services is usually uncertain.
Forecasting can be used for…
Strategic planning (long range planning)
Finance and accounting (budgets and cost controls)
Marketing (future sales, new products)
Production and operations

21. Predicted demand looking back six months
What is forecasting all about?
We try to predict the future by looking back at the past
Demand for Mercedes E Class
Time
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Predicted demand looking back six months
Actual demand (past sales)
Predicted demand

22. Key issues in forecasting
A forecast is only as good as the information included in the forecast (past data)
History is not a perfect predictor of the future (i.e.: there is no such thing as a perfect forecast)

23. Example: Mercedes E-class vs. M-class Sales
Month
E-class Sales
M-class Sales
Jan
23,345 -
Feb
22,034
Mar
21,453
Apr
24,897
May
23,561
Jun
22,684
Jul ?
Question: Can we predict the new model M-class sales based on the data in the table?
Answer: Maybe... We need to consider how much the two markets have in common

24. What should we consider when looking at past demand data?
Trends
Seasonality
Cyclical elements
Autocorrelation
Random variation

25. Types of forecasting methods
Qualitative methods
Quantitative methods
Rely on subjective opinions from one or more experts.
Rely on data and analytical techniques.

26. Qualitative forecasting methods
Market Research: trying to identify customer habits; new product ideas.
Panel Consensus: deriving future estimations from the synergy of a panel of experts in the area.
Historical Analogy: identifying another similar market.
Delphi Method

27. Quantitative forecasting methods
Time Series: models that predict future demand based on past history trends
Causal Relationship: models that use statistical techniques to establish relationships between various items and demand