An Important Part of Business Is to Plan Ahead. Identify Three Planning Tools Used for Forecasting and the Information Each Provides.

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1. An important part of business is to plan ahead. Identify three planning tools used for forecasting and the information each provides. The first of the three planning tools is “product cost”. The second is referred to as “incremental analysis” and the third is “developing a budget”. Kelly/McGowen (2012) (p.111). Product cost is more complicated than first meets the eye. The cost of the product material, labor and overhead cost are factored to ascertain product cost. (Kelly & McGowen 2012). The Incremental analysis is a tool to develop total cost analyst of a company’s product. This process crunches all the numbers and data associated with a particular product to ascertain if the company should build a particular product or out source for absolute profit. The final tool we will discuss is developing a strong budget. The budget requires a company to identify a way ahead or a financial road map for a given period of time. To be effective the budget planners need to forecast all possible expensive. There are many different methods to accomplish financial budgeting goals. Some of the methods highlighted in BUSN 4 are: Kelly/McGowen (2012) The “Top-Down” method is when upper management dictates how the money will be utilized. The positive aspect of this method limited resources and upper management is the driving forces behind company goals. The “Bottom-up” method is a lower level manager and supervisors develops budget and submits to upper management for approval. (p. 114) References Kelly & McGowen (2012) BUSN 4 (4th ed.) Mason, OH Cengage
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