Question

Exercise 1-2

Classify the following activities as primarily planning, implementation, or control:

a. Doing a cost–benefit analysis of adding a new branch versus installing three new automated teller machines (ATMs).

b. Estimating the cost of raw materials to be purchased during the next quarter.

c. Analyzing market demand to assist in the preparation of the sales budget.

d. Compiling the labour report for the past week.

e. Outlining the changes to a process based on a process reengineering team report.

f. Documenting the savings from reductions in raw materials inventory resulting from the adoption of a JIT inventory system.

What I got as solutions:

a. planning

b. planning

c. planning

d. control

e. implementation

f. implementation

Could someone please explain what the difference between the three keywords are and if my solution makes sense?

Answer 1

Primary planning means planning done at the very initial stages, so as to cut the chances of errors and ensuring that things are right in place. This means effectively managing the operations so that there is no scope of any mishap or inadequate controls that pose a threat to the enterprise, and makes the entire system vulnerable.

Implementation refers to employing the resources so as to ensure adequacy and efficiency of internal controls. Basically, it is laying down methods and adopting such techniques as would ensure safety and security.

Control is nothing but the policies, principles, standards and compliance requirements that are laid to ensure that undesirable events are prevented, detected and corrected.

Your solution makes absolute sense. As per my understanding of the terms mentioned and described above, I believe that all your solutions are correct.