Difference between planning and forecasting pdf
File Name: difference between planning and forecasting .zip
- Planning and Forecasting
- Difference Between Planning and Forecasting (With Table)
- Relation between Planning and Decision-Making
Posted by Terms compared staff Apr 28, Management.
Planning and Forecasting
Most of the companies use strategic planning, budgeting and forecasting to evaluate their current situation and to get a better view on the future of the company. Especially the use of spreadsheets may lead to problems like inconsistencies and a lack of flexibility. We would like to deal with two main questions in this article: what are the differences between strategic planning, budgeting and forecasting? And how can a professional tool help you in achieving efficiency in these processes? Strategic planning has the purpose to define the direction and expectations of a company, which are based on the vision of the stakeholders. An activity plan is established for a timeline of three to five years: what are the main objectives and where does the company want to be within 3 to 5 years?
Difference Between Planning and Forecasting (With Table)
The main difference between Forecasting and Planning is that Forecasting, is a prediction or projection about a future event, depending on the past and present performance and trend and planning is the process of drafting plans for what should do in future, and that too based on the present performance plus expectations. Forecasting is predicting the future performance of the organization based on past and present performance and data, whereas planning is the process of thinking about the future course of action in advance. Forecasting provides a base for planning and plays a vital role in the process of planning. Forecasting based on a certain degree of guess and assumption of a particular event conversely planning is based on objective, performance and relevant information which require making a plan. Forecasting based on Facts and some assumptions based on past and current performance. Planning on the other hand stresses on facts and expectation. Forecasting is done by different level of managers, analysts, and experts employed by the organization while Planning is the responsibility of top-level managers.
Forecasting, is basically a prediction or projection about a future event, depending on the past and present performance and trend. Conversely, planning, as the name signifies, is the process of drafting plans for what should be done in future, and that too is based on the present performance plus expectations. Planning and forecasting are two important managerial functions that are relevant for other functions. On the contrary, planning implies thinking before acting, i. This article makes an attempt to clear the differences between forecasting and planning. Basis for Comparison Forecasting Planning Meaning Forecasting alludes to estimating future performance of an entity, considering past and current performance and facts.
Forecasting, is basically a prediction or projection about a future event, depending on the past and present performance and trend. Conversely.
Relation between Planning and Decision-Making
Successfully running any business requires a combination of coherent goals, strategies to meet those goals and analysis to evaluate what to do when goals are not met. Planning, budgeting and forecasting are all pieces of the financial management puzzle and together they can help form, analyze and evaluate financial performance and suggest solutions to problems. It's more than putting together spreadsheets or crunching numbers. Planning is the process by which a company sets out its overall goals and the specific strategies it will implement to meet them, in both the short and long term. It may include the budget, as well as other qualitative and quantitative methods.
Both Planning and forecasting are basic and most important managerial activity. They are closely related to each other. Planning gives answer to how, when and what to be done. It is a goal oriented activity which designs future course of action and provides future environment of organization.
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Among the various activities and functions performed in the management, Planning and Forecasting are two of the most essential functions. Both these functions are integral for any organization and help in the growth and development of an organisation. Various other functions within an organization are dependent on the process of Planning and Forecasting.