Test: Planning - 2 - Commerce MCQ

Training, Lectures and Seminar are different types of methods.  Methods are a standard way of doing jobs for attaining objectives. They are more detailed than procedure. They are helpful in simplifying the work for different jobs and different methods are adopted.

Programmes are the combinations of objectives,policies,procedure and rules all these plans together form a program.The programs are made to get the systematic working in the organisation. For example:-Construction of shopping mall,Development of a new product etc. , And development of a new product involves objective policies procedure and rules .

The correct option is Option B.

A cash flow budget is a summary of the projected cash inflows and outflows for a business over a period of time. The time period is usually a future accounting period and is divided into quarters or months.

Increasing sales by 15% is an objective.
Explanation:
Increasing sales by 15% is a goal or objective that a company sets to achieve. It is a specific target to increase the revenue generated from sales by 15%. Here is a detailed explanation:
Objective:
An objective is a specific and measurable goal that a company aims to achieve. It provides direction and focus for the organization and helps in evaluating the success of its actions. In this case, increasing sales by 15% is the objective.
Importance of Increasing Sales:
Increasing sales is crucial for the growth and profitability of a business. It allows the company to generate more revenue, expand its customer base, and improve market share. By increasing sales, a company can also achieve economies of scale, reduce costs, and enhance its competitive position in the market.
Methods to Increase Sales:
To achieve the objective of increasing sales by 15%, companies can employ various methods and strategies, such as:
- Marketing and advertising campaigns to reach a wider audience and attract new customers.
- Enhancing the quality of products or services to increase customer satisfaction and loyalty.
- Offering promotions, discounts, or incentives to encourage more sales.
- Expanding distribution channels to reach new markets or regions.
- Improving sales techniques and training for sales teams.
- Conducting market research to identify customer needs and preferences.
- Building strong relationships with existing customers through excellent customer service.
- Utilizing technology and digital platforms for online sales and marketing.
Evaluation and Monitoring:
To ensure progress towards the objective of increasing sales by 15%, it is essential to regularly evaluate and monitor sales performance. This can be done by analyzing sales data, tracking key performance indicators (KPIs), and comparing results against targets. Adjustments and improvements can then be made based on the evaluation findings to further optimize sales strategies and achieve the desired sales increase.
In conclusion, increasing sales by 15% is an objective that requires strategic planning, implementation of various methods, and ongoing evaluation to ensure success.

Limitations of Planning:
1. Planning does not guarantee success: Planning is a process of setting goals, defining strategies, and outlining actions to achieve those goals. However, despite careful planning, there is no guarantee that the desired outcomes will be achieved. External factors, unforeseen circumstances, or changes in the environment can affect the success of the plan.
2. Overemphasis on planning can lead to inflexibility: Excessive focus on planning can result in rigidity and an inability to adapt to changing circumstances. Plans may become outdated or irrelevant if they are not regularly reviewed and adjusted. This can hinder an organization's ability to respond effectively to new opportunities or challenges.
3. Planning can be time-consuming and resource-intensive: Developing and implementing a comprehensive plan requires time, effort, and resources. This can divert attention and resources away from other important tasks and activities. In some cases, the costs associated with planning may outweigh the benefits.
4. Planning may create a false sense of security: When a plan is in place, there is a tendency to believe that everything is under control and will go according to plan. This can lead to complacency and a lack of vigilance in monitoring and adjusting the plan as necessary. It is important to recognize that planning is an ongoing process that requires continuous evaluation and adaptation.
5. Planning may lead to over-reliance on assumptions: Planning involves making assumptions about the future based on available information and analysis. However, these assumptions may not always hold true, and relying too heavily on them can lead to flawed decision-making. It is important to regularly reassess and update the assumptions underlying the plan.
Overall, while planning is a valuable tool for organizations, it is important to be aware of its limitations and to continuously monitor and adapt plans to changing circumstances.

The first step of planning is Setting objectives
Planning is an essential process in any organization or project, as it helps to define goals and determine the best course of action to achieve those goals. The first step in the planning process is setting objectives, which involves clearly defining what needs to be accomplished.
Setting objectives is important because it provides a clear direction and purpose for the planning process. By establishing specific and measurable objectives, organizations and individuals can focus their efforts on what needs to be achieved and create a roadmap for success.
Here are some key points to consider when setting objectives in the planning process:
- Identify goals: Determine the overall goals and outcomes that need to be achieved. These goals should be specific, measurable, achievable, relevant, and time-bound (SMART).
- Define success: Clearly articulate what success looks like for each objective. This helps to provide a clear target to work towards and measure progress.
- Prioritize: Determine the relative importance and urgency of each objective. This helps to allocate resources and focus efforts on the most critical objectives.
- Align with the overall vision: Ensure that the objectives align with the organization's or project's overall vision and mission. This helps to ensure coherence and consistency in the planning process.
- Involve stakeholders: Engage key stakeholders in the objective-setting process to ensure buy-in and alignment. This helps to create a sense of ownership and commitment to the objectives.
By setting clear objectives at the beginning of the planning process, organizations and individuals can lay the foundation for effective and successful planning. This step provides a clear direction and purpose, guiding subsequent steps such as alternative selection, implementation, and follow-up actions.

The last step in the planning process is the follow-up action. This step involves monitoring and evaluating the implementation of the plan to ensure that it is on track and achieving the desired outcomes. Here is a detailed explanation of the follow-up action step:
1. Monitoring progress: This involves regularly tracking the progress of the plan's implementation and comparing it to the set objectives. It helps identify any deviations or issues that need to be addressed.
2. Evaluating results: Once the plan has been fully implemented, it is important to evaluate the results to determine whether the objectives have been met. This evaluation can be done through various methods such as surveys, feedback from stakeholders, or data analysis.
3. Making adjustments: Based on the evaluation results, adjustments may need to be made to the plan or its implementation. This could involve revising objectives, reallocating resources, or changing strategies to improve outcomes.
4. Learning from the process: The follow-up action also provides an opportunity to reflect on the planning process itself and identify any lessons learned. This feedback can be valuable for future planning efforts and continuous improvement.
5. Communicating outcomes: Finally, the outcomes of the planning process and the follow-up action should be communicated to relevant stakeholders. This helps ensure transparency and accountability, and allows for further input and feedback.
By following these steps, organizations can effectively close the planning process and ensure that the desired outcomes are achieved.

The Gap in Planning:
The gap in planning refers to the disconnect between the present situation and the desired future position. Planning aims to bridge this gap by creating a roadmap to achieve the desired goals and objectives.
Bridging the Gap:
To bridge the gap between the present and future position, planning focuses on various aspects:
1. Assessment of Current Situation: Planning involves a comprehensive analysis of the present situation, including the strengths, weaknesses, opportunities, and threats. This assessment provides a clear understanding of the current position.
2. Setting Goals and Objectives: Based on the analysis of the current situation, planning establishes specific goals and objectives that need to be achieved in the future. These goals serve as a benchmark for measuring progress.
3. Identifying Strategies and Actions: Planning determines the strategies and actions required to reach the desired future position. This includes identifying the resources, timelines, and steps needed to implement the plan effectively.
4. Allocating Resources: Planning involves allocating the necessary resources such as finances, manpower, and technology to execute the strategies and actions identified. This ensures that there is adequate support to bridge the gap.
5. Monitoring and Evaluation: Planning includes continuous monitoring and evaluation of progress towards the desired future position. This helps in identifying any deviations or obstacles and making necessary adjustments to stay on track.
6. Adaptation and Flexibility: Planning acknowledges that the future is uncertain and dynamic. Therefore, it allows for adaptability and flexibility in adjusting the plan as new information or circumstances arise.
Conclusion:
Planning plays a crucial role in bridging the gap between the present and future position of an individual, organization, or society. By strategically analyzing the current situation, setting goals, and implementing effective strategies, planning ensures progress towards the envisioned future position.

Planning is concerned with looking forward

Planning involves the process of setting goals, determining actions to achieve those goals, and allocating resources effectively to accomplish the desired outcomes. It is an essential management function that helps organizations anticipate and prepare for the future. Planning is forward-thinking and focuses on proactively addressing potential challenges and opportunities.

In the context of the given options, the correct answer is D: Looking forward. Here's why:

• Looking back: This option is incorrect because planning is not about reflecting on past events or actions. While analyzing past performance can inform future decisions, planning is primarily concerned with future-oriented actions.


• Looking at old records: While past records can provide valuable information for planning purposes, planning is not solely about examining historical data. It involves considering current and future factors as well.


• Looking at new records: While staying updated with new records and information is important for effective planning, it is not the central focus. Planning is more about anticipating and preparing for the future rather than solely relying on new records.


• Looking forward: This is the correct option. Planning involves looking forward, envisioning future outcomes, and developing strategies to achieve them. It involves setting objectives, identifying potential obstacles, and creating action plans to reach desired goals.

In summary, planning is concerned with looking forward and taking proactive steps to achieve desired outcomes. It involves setting goals, allocating resources, and developing strategies to navigate the future effectively.

Profitability can be increased by various methods like reducing cost, increasing turnover costs, increasing productivity, and increasing efficiency. 
All of the mentioned methods can be achieved by effective planning. By achieving these methods by planning it will help in increasing profitability, not decreasing it.

Planning is a Mental Exercise
Planning is not a useless function, one-time process, or an obsolete concept. It is a mental exercise that involves various steps and considerations to achieve desired outcomes. Here is a detailed explanation:
Definition of Planning:
- Planning is the process of setting goals, defining objectives, and determining the actions needed to achieve them.
- It involves analyzing the current situation, identifying potential obstacles, and developing strategies to overcome them.
Importance of Planning:
- Planning provides a clear direction and purpose for individuals or organizations.
- It helps in utilizing resources effectively and efficiently.
- Planning minimizes risks and uncertainties by considering alternative courses of action.
- It improves decision-making by evaluating different options and their implications.
- Planning enhances coordination and communication among team members or departments.
- It facilitates the allocation of time, effort, and resources in a systematic manner.
Characteristics of Planning:
- Planning is a continuous process that requires regular review and adjustments.
- It involves setting SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals.
- Planning considers both short-term and long-term objectives.
- It requires flexibility to adapt to changing circumstances and unforeseen challenges.
Steps in the Planning Process:
1. Identifying goals and objectives: Clearly define what needs to be achieved.
2. Analyzing the current situation: Assess the strengths, weaknesses, opportunities, and threats.
3. Generating alternative strategies: Brainstorm different approaches to achieve the goals.
4. Evaluating alternatives: Assess the feasibility, risks, and benefits of each strategy.
5. Selecting the best strategy: Choose the most suitable option based on the evaluation.
6. Developing an action plan: Create a detailed plan outlining the tasks, timelines, and responsible individuals.
7. Implementing the plan: Put the plan into action and monitor progress.
8. Reviewing and adjusting: Regularly evaluate the plan's effectiveness and make necessary modifications.
Conclusion:
Planning is not a useless or outdated concept; rather, it is a crucial mental exercise that helps individuals and organizations achieve their goals. By following a structured planning process, one can ensure effective utilization of resources, minimize risks, and improve decision-making.

Planning helps in reducing the risk of uncertainty through:

• Identification of potential risks: Planning allows for the identification of potential risks and uncertainties that may arise during the execution of a project or task. By anticipating these risks, appropriate measures can be put in place to mitigate them.


• Contingency planning: Effective planning involves developing contingency plans to address unforeseen circumstances or risks. These plans act as a safety net, providing alternative strategies or actions to be taken if the original plan encounters unexpected challenges.


• Resource allocation: Planning helps in efficiently allocating resources such as time, money, and manpower. By carefully considering the requirements of a project, planning ensures that the necessary resources are available to minimize the impact of uncertainties.


• Setting realistic goals and targets: Planning involves setting realistic and achievable goals and targets. By doing so, it reduces the likelihood of overestimating capabilities or underestimating risks, thus minimizing the potential for uncertainty.


• Enhanced decision making: Through planning, decisions can be made in a more informed and thoughtful manner. This reduces the element of uncertainty by considering various factors, analyzing potential outcomes, and selecting the most appropriate course of action.


• Improved communication and coordination: Planning facilitates effective communication and coordination among team members or stakeholders. This enables the sharing of information, identification of potential risks, and collective problem-solving, thereby reducing uncertainty.

Therefore, planning plays a crucial role in reducing the risk of uncertainty by identifying risks, developing contingency plans, allocating resources effectively, setting realistic goals, enhancing decision making, and improving communication and coordination.

Limitation of Planning:
- Rigidity: Planning can lead to rigidity in decision-making and implementation due to the predetermined nature of plans. This can restrict flexibility and adaptability in response to changing circumstances or new information.
- Resistance to change: The emphasis on adherence to the plan may create resistance to change within the organization. This can hinder innovation and the ability to respond effectively to unexpected events or market shifts.
- Time-consuming: Planning requires careful analysis, evaluation, and consideration of various factors. This process can be time-consuming, especially for complex or long-term plans, which may delay the implementation of necessary actions.
- Costly: Developing and executing plans often require resources such as time, money, and personnel. The costs associated with planning can be significant, especially if plans need to be revised or adjusted frequently.
- Unpredictability: Planning is based on assumptions and predictions about the future. However, the future is inherently uncertain, and plans may not account for unforeseen events or changes in circumstances. This can make plans ineffective or irrelevant in certain situations.
- Overemphasis on planning: Sometimes, organizations may become overly reliant on planning and neglect other important aspects of management, such as communication, coordination, and problem-solving skills. This can lead to a narrow focus and limited effectiveness in achieving organizational goals.
In conclusion, while planning is an essential management function, it is important to acknowledge its limitations. Being aware of these limitations can help organizations mitigate potential drawbacks and ensure that planning is used effectively in conjunction with other management practices.

Correct Answer :- a

Explanation : Single use plan is developed to address a specific organizational situation. Such a plan is typically used only once because the specific situation to which they apply does not recur. Consider, for example, the plan of SAP Americas, a leading provider of enterprise resource planning and ecommerce solutions, to build a new corporate headquarters. A sophisticated plan was necessary to finance, construct, and move into the new building.

The correct answer is B: Policy.
Explanation:
When a firm decides to sell its product on a cash basis only, it is considered part of the firm's policy. Here is a detailed explanation:
Policy:
- Policies are the guidelines and rules set by an organization to govern its actions and decision-making processes.
- They provide a framework for the organization's overall direction and help in achieving its objectives.
- Policies can be related to various aspects of the business, including sales, marketing, finance, operations, etc.
- Selling a product on a cash basis only is a specific policy related to the firm's sales and revenue collection processes.
Procedure:
- Procedures are the step-by-step instructions that specify how to carry out a particular task or activity.
- They outline the sequence of actions to be followed to achieve a specific outcome.
- While selling a product on a cash basis may involve certain procedures, it is not the overall category that this decision falls into.
Method:
- Methods refer to the techniques, tools, or approaches used to accomplish a task or objective.
- Selling a product on a cash basis may involve specific methods for accepting and processing cash payments, but it does not encompass the broader category of methods.
Objectives:
- Objectives are the specific goals or targets that an organization aims to achieve.
- While selling a product on a cash basis may align with certain objectives such as improving cash flow or reducing credit risk, it is not the category that this decision falls into.
Therefore, the correct answer is B: Policy, as selling a product on a cash basis only is part of the firm's policy.

Method is not a strict rule or a rigid policy like a rule or a law, which prohibits you from doing a certain thing and that's why no penalty is charged. it's not a necessity to follow a method, whereas for a law or a rule it is.

A program is a detailed plan of action aimed at accomplishing a clear business objective, with details on what work is to be done, by whom, when, and what means or resources will be used.

A decision matrix is a series of values in a table of columns and rows that allows a person to visually compare possible solutions by weighing their variables based on importance.
Performance management is not part of the decision-making matrix, it is concerned with performance of organization, a department, employee or a particular task.

Planning is commitment to a certain work to achieve specific results. The two types of plane are Standing plans and Single-use plans.
Standing Plans- These plans are formulated to guide managerial decisions and actions on problems which are recurring in nature. They are also known as ‘repeated use plans’.
Single use plans- These plans are used to solve a particular problem that is non-recurring in nature.

Plans can be implemented after the selecting an alternative. The best alternative is selected but as such there is no mathematical formula to select the best alternative. Sometimes instead of selecting one alternative a combination of different alternatives can also be selected. The most ideal plan is most feasible, profitable and with least negative consequences.