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TECHNIQUES
AND TOOLS
FORECASTING
BREAK-EVEN
ANALYSIS
SCHEDULING
MANAGEMENT BY
OBJECTIVES
FORECASTING
THIS IS AN ATTEMPT TO
FORETELL OR PREDICT FUTURE
TRENDS, EVENTS OR
CONDITIONS FROM KNOWN
DATA AND TO PREPARE FOR
THE EXPECTED CHANGES IN
BUSINESS OR INDUSTRY.
under THIS TECHNIQUE, PAST
AND PRESENT OR CURRENT
INFORMATION IS USED TO
PREDICT FUTURE EVENTS OR
CONDITIONS. SOME COMMONLY
USED METHODS FOR
FORECASTING ARE:
1. SURVEY METHOD
2. TREND METHOD
3. ECONOMETRIC METHOD
1. SURVEY METHOD
It involves probing the customer
or respondent through
questionaires or interviews.
Usually a sample group is chosen
for this purpose. The sample
chosen must be representative of
the group whose opinions the
organization is soliciting.
2. Trend METHOD
Also called time series analysis.
Under this method, the future is
predicted by projected trends
using data or information. This
method brings out a
relationship between sales and
times.
3. Econometric method
The use of econometric models is
another of forecasting. These
models are based on statistical
methods of analyzing data and
making predictions. They help
find the historical relationship
between sales volume and a
number of independent variables.
Break-even analysis
Break-even charts are used or
planning purposes. The mechanics
of break-even charts are
discussed in the chapter dealing
with the control function
The break-even analysis table calculates a
break-even point based on fixed costs,
variable costs per unit of sales, and
revenue per unit of sales.
scheduling
This is the term used for
planning time for various
activities in an
organization. A number
od scheduling techniques
are available, ranging
from simple to complex.
Critical Path Analysis and PERT are
powerful tools that help you to
schedule and manage complex
projects.
They were developed in the 1950s to control large
defense projects, and have been used routinely since
then. As with Gantt Charts , Critical Path Analysis
(CPA) or the Critical Path Method (CPM) helps you to
plan all tasks that must be completed as part of a
project.
They act as the basis both for preparation of a
schedule, and of resource planning. During
management of a project, they allow you to
monitor achievement of project goals. They help you
to see where remedial action needs to be taken to get
a project back on course.
Drawing a Critical Path Analysis Chart
Use the following steps to draw a CPA Chart:
Step 1. List all activities in the plan
Task Earliest start Length Type Dependent on...
A. High level analysis Week 0 1 week Sequential
B. Selection of hardware
Week 1 1 day Sequential A
platform
C. Installation and
Week 1.2 2 weeks Parallel B
commissioning of hardware
K. Development and QA of
Week 5 1 week Parallel E
accounting reporting
L. Development and QA of
Week 5 1 week Parallel E
management reporting
M. Development of
Management Information Week 6 1 week Sequential L
System
N. Detailed training Week 9 1 week Sequential I, J, K, M
Step 2. Plot the activities as a
circle and arrow diagram