© Prentice Hall, Modern Management 9 th edition.

© Prentice Hall,  Objectives A complete definition of a plan Insights regarding various dimensions of plans An understanding of various types of plans Insights into why plans fail A knowledge of various planning areas within an organization A definition of forecasting An ability to see the advantages and disadvantages of various methods of sales forecasting A definition of scheduling An understanding of Gantt charts and PERT.

© Prentice Hall, P LANS: A D EFINITION Dimensions of Plans Repetitiveness Time Scope Level.

© Prentice Hall, P LANS: A D EFINITION Figure 9.1 Four major dimensions to consider when developing a plan.

© Prentice Hall, P LANS: A D EFINITION Types of Plans Standing Plans: Policies, Procedures, and Rules Single-Use Plans: Programs and Budgets.

© Prentice Hall, P LANS: A D EFINITION Figure 9.2 Standing plans and single-use plans.

© Prentice Hall, P LANS: A D EFINITION Figure 9.3 A successful standing plan program with mutually supportive policies, procedures, and rules.

© Prentice Hall, P LANS: A D EFINITION Why Plans Fail 1.Corporate planning is not integrated into the total management system 2.There is a lack of understanding of the different steps of the planning process 3.Management at different levels has not properly contributed to planning activities 4.Responsibility for planning is wrongly vested solely in the planning department 5.Management expects that plans developed will be realized with little effort 6.In starting formal planning, too much is attempted at once 7.Management fails to operate by the plan 8.Financial projections are confused with planning 9.Inadequate inputs are used in planning 10.Management fails to grasp the overall planning process.

© Prentice Hall, P LANS: A D EFINITION Planning Areas: Input Planning Plant Facilities Planning Site selection 1. Deciding on a set of variables critical to obtaining an appropriate site 2. Assigning each of these variables a weight reflecting its relative importance 3. Ranking alternative sites according to how they reflect these different variables Human Resource Planning Questions for personnel planners 1. What types of people does the organization need to reach its objectives? 2. How many of each type are needed? 3. What steps should the organization take to recruit and select such people? 4. Can present employees be further trained to fill future needed positions? 5. At what rate are employees being lost to other organizations?.

© Prentice Hall, P LANS: A D EFINITION Table 9.1 Major Areas of Consideration When Selecting a Plant Site and Sample Exploratory Questions to Be Asked Major AreasSample Questions Profit Market LocationWhere are our customers in relation to the site? CompetitionWhat competitive situation exists at the site? Operating costs SuppliersAre materials available near the site at reasonable cost? UtilitiesWhat are utility rates at the site? Are utilities available in sufficient amounts? WagesWhat wage rates are paid by comparable organizations near the site? TaxesWhat are tax rates on income, sales, property, and so on for the site? Investment costs Land/developmentHow expensive are land and construction at the site? Others TransportationAre airlines, railroads, highways, and so on accessible from the site? LawsWhat laws related to zoning, pollution, and so on will influence operations if the site is chosen? LaborDoes an adequate labor supply exist around the site? UnionizationWhat is the degree of unionization in the site area? Living conditionsAre housing, schools, and so on around the site appropriate? Community relationsDoes the community support the organization’s moving into the area?.

© Prentice Hall, P LANS: A D EFINITION Table 9.2 Results of Weighting Seven Site Variables for Six Countries Sites Maximum Criteria Value Assigned Japan Chile Jamaica Australia Mexico France Living conditions Accessibility Industrialization Labor availability Economics Community capability & attitude Effect on company reputation Total

© Prentice Hall, P LANS: A D EFINITION Figure 9.4 The human resource planning process.

© Prentice Hall, P LANNING T OOLS Forecasting How Forecasting Works Insect Control Services forecasts by attempting to do the following: 1. Establish relationships 2. Determine the impact government restrictions 3. Evaluate sales growth potential, profitability, resources required, and risks 4. Evaluate the potential for expansion of marketing efforts 5. Determine the likelihood of technological breakthroughs Types of Forecasts.

© Prentice Hall, P LANNING T OOLS Forecasting (con’t) Methods of Sales Forecasting Jury of Executive Opinion Method 1.Experts answer questions about area being forecasted 2. First summary of all the answers is prepared 3. Experts get copies of first summary to modify as necessary 4. Distribute second summary of these modifications to experts Must justify opinions that deviate significantly from norm 5. Distribute third summary of opinions and justifications to experts Justification for all answers is now required 6. Generate forecast from opinions and justifications from 5 Salesforce Estimation Method Time Series Analysis Method Product Stages: introduction, growth, maturity, saturation, and decline.

© Prentice Hall, P LANNING T OOLS Figure 9.5 Time series analysis method.

© Prentice Hall, P LANNING T OOLS Figure 9.6 Stages of the product life cycle.

© Prentice Hall, P LANNING T OOLS Forecasting (con’t) Evaluating Sales Forecasting Methods Scheduling Gantt Charts Features.

© Prentice Hall, P LANNING T OOLS Figure 9.7 Completed Gantt chart.

© Prentice Hall, P LANNING T OOLS Forecasting (con’t) Program Evaluation and Review Technique (PERT) Defining PERT Activities Events Features Critical Path Steps in Designing a PERT Network 1. List all the activities/events for project and their sequence 2. Determine time needed to complete each activity/event 3. Design PERT reflecting all information contained in 1 and 2 4. Identify the critical path.

© Prentice Hall, P LANNING T OOLS Figure 9.8 PERT network designed for building a house.

© Prentice Hall, Chapter Nine Questions