Planning

It is the process of determining the objectives. to visualize the future ,analyze the past, relate to present ,formulation of policies and programme,preparation of schedule and budgeting. thus planning is the systematic thinking about the ways means for the accomplishments of predetermined objectives that can be achieved.

Characteristics of planning
Intellectual activity Decision making Is a continuous process Is a primary function A goal oriented

Importance of planning
Determine future destination Reduces risks of uncertainty Discovery of new idea Economies of organisation

Types of planning
Purpose or missions Objectives or goals Strategies Policies Procedures Programs Budgets

Steps in planning
Being aware of opportunity Establishing objectives Developing premises Identifying the alternatives Comparing alternatives in light of goals sought Choosing the alternative Formulating the derivative plan Numberizing plans by budgeting

Decision Making
It is defined as the selection of a course of action from alternatives ,it is at the core of planning. A plan cannot be said to exist unless a decision a commitment of resources, direction or reputation has been made. The process of identifying problems and opportunities and then resolving them.

 Management decisions typically fall under two category-: Programmed and non programmed decisions. Programmed decisions are made in response to a situation that has occurred often enough to enable decision rules to be developed and applied in future. Non programmed are made to a situation that is unique ,is poorly defined and largely unstructured and has important consequence for the organization.

Decision making steps

Recognition of decision requirements'. Diagnosis and analysis of causes Development of alternatives Selection of desired alternatives Implementation of chosen alternatives Evaluation and feedback

Forecasting
Forecasting is the process of making statements about events whose actual outcomes (typically) have not yet been observed. Planning for the future is a critical aspect of managing any organization, and small business enterprises are no exception. Indeed, their typically modest capital resources make such planning particularly important. In fact, the long-term success of both small and large organizations is closely tied to how well the management of the organization is able to foresee its future and to develop appropriate strategies to deal with likely future scenarios. Intuition, good judgment, and an awareness of how well the industry and national economy is doing may give the manager of a business firm a sense of future market and economic trends

characteristics that are common to a good forecast:

Accuratesome degree of accuracy should be determined and stated so that comparison can be made to alternative forecasts. Reliablethe forecast method should consistently provide a good forecast if the user is to establish some degree of confidence. Timelya certain amount of time is needed to respond to the forecast so the forecasting horizon must allow for the time necessary to make changes. Easy to use and understandusers of the forecast must be confident and comfortable working with it. Cost-effectivethe cost of making the forecast should not outweigh the benefits obtained from the forecast.

Methods of forecasting
QUALITATIVE FORECASTING METHODS -Qualitative forecasting techniques generally employ the judgment of experts to generate forecasts. A key advantage of these procedures is that they can be applied in situations where historical data are simply not available. Moreover, even when historical data are available, significant changes in environmental conditions affecting the relevant time series may make the use of past data irrelevant and questionable in forecasting future values of the time series. The important qualitative forecasting methods are: the Delphi technique, Nominal Group Technique, Sales Force opinions. Executive opinion, Market Research.

QUANTITATIVE FORECASTING METHODS Quantitative forecasting methods are used when historical data on variables of interest are availablethese methods are based on an analysis of historical data concerning the time series of the specific variable of interest. There are two major categories of quantitative forecasting methods Trends projection method, Exponential smoothening method

DELPHI TECHNIQUE. In the Delphi technique, an attempt is made to develop forecasts through "group consensus." Usually, a panel of experts is asked to respond to a series of questionnaires. The experts, physically separated from and unknown to each other, are asked to respond to an initial questionnaire (a set of questions). Then, a second questionnaire is prepared incorporating information and opinions of the whole group. Each expert is asked to reconsider and to revise his or her initial response to the questions. This process is continued until some degree of consensus among experts is reached. It should be noted that the objective of the Delphi technique is not to produce a single answer at the end. Instead, it attempts to produce a relatively narrow spread of opinionsthe range in which opinions of the majority of experts lie

 NOMINAL GROUP TECHNIQUE. Nominal Group Technique is similar to the Delphi technique in that it utilizes a group of participants, usually experts. After the participants respond to forecast-related questions, they rank their responses in order of perceived relative importance. Then the rankings are collected and aggregated. Eventually, the group should reach a consensus regarding the priorities of the ranked issues.

 SALES FORCE OPINIONS. The sales staff is often a good source of information regarding future demand. The sales manager may ask for input from each salesperson and aggregate their responses into a sales force composite forecast. Caution should be exercised when using this technique as the members of the sales force may not be able to distinguish between what customers say and what they actually do. Also, if the forecasts will be used to establish sales quotas, the sales force may be tempted to provide lower estimates

 EXECUTIVE OPINIONS. Sometimes upper-levels managers meet and develop forecasts based on their knowledge of their areas of responsibility. This is sometimes referred to as a jury of executive opinion. MARKET RESEARCH. In market research, consumer surveys are used to establish potential demand. Such marketing research usually involves constructing a questionnaire that solicits personal, demographic, economic, and marketing information. On occasion, market researchers collect such information in person at retail outlets and malls, where the consumer can experiencetaste, feel, smell, and seea particular product. The researcher must be careful that the sample of people surveyed is representative of the desired consumer target.