Question 1

Financial budgets:

Accepted Answer

Financial budgets are primarily concerned with projecting cash flows and expenditures to ensure that an organization can meet its financial obligations and plan for future financial needs.

Question 2

Which of the following is a long-term version of contingency planning?

Accepted Answer

Scenario planning involves creating multiple possible scenarios for the future and developing strategies to address each scenario. This is a long-term version of contingency planning as it considers a range of potential challenges and uncertainties that may arise in the future, and aims to prepare the organization to respond effectively to each of these scenarios.

Question 3

A fixed budget:

Accepted Answer

A fixed budget sets a specific amount of resources for a specific purpose, and it does not vary with changes in activity levels or revenue. It is not based on allocating resources like labor, equipment, and space nor does it always have equal expenditures and revenue.

Question 4

_____ is the process of predicting what will happen in the future.

Accepted Answer

Forecasting is the process of predicting what will happen in the future based on existing information and past trends. Benchmarking is the process of comparing your performance with that of your peers, while scenario planning involves creating different scenarios to map out different potential futures. Contingency planning involves preparing for unexpected events, and staff planning involves projecting future staffing needs.

Question 5

_____ identifies alternative courses of action to take when things go wrong.

Accepted Answer

Contingency planning identifies alternate courses of action to take when unexpected events or circumstances arise. Internal benchmarking involves comparing an organization's performance to its own previous performance, while external benchmarking involves comparing an organization's performance to that of other similar organizations. Goal setting involves setting specific targets for an organization to achieve, and staff planning involves determining the staffing needs of an organization.

Question 6

Which of the following types of budgets plot anticipated sales or revenues against expenses?

Accepted Answer

Operating budgets plot anticipated sales or revenues against expenses. Zero-based budgets require justification for all expenses, nonmonetary budgets do not involve money, financial budgets focus on financial statements, and fixed budgets allocate a specific amount of funds regardless of changes in sales or expenses.

Question 7

_____ is the use of external and internal comparisons to better evaluate one's current performance and identify possible ways to improve for the future.

Accepted Answer

Benchmarking is the process of comparing one's current performance with external and internal benchmarks (such as industry or company standards) to identify areas for improvement. This helps in determining how well an organization is doing in comparison to other organizations and what can be done to improve its performance.

Question 8

What is the primary difference between a policy and a procedure?

Accepted Answer

A policy is a broad guideline that provides direction for decision-making and action, while a procedure provides step-by-step instructions for carrying out a specific task or process. Policies are more general, outlining the broad principles that govern decision-making, while procedures are more specific and define the specific actions that should be taken in a given situation. For example, a company may have a policy on data security that outlines the importance of protecting sensitive information, but the procedure for handling a data breach would provide step-by-step instructions for responding to the incident.

Question 9

Morrison Manufacturing (MM) creates a budget for projects or activities in each new budget period as if it were brand new. It does not renew any of the past funding. MM is using a(n) _____ budgeting approach.

Accepted Answer

The scenario describes zero-based budgeting, where each budget period starts from scratch and all costs must be justified and approved, regardless of whether they were included in past budgets.

Question 10

Riveras, a chain of discount stores, utilized the best retailing strategies of another successful retail chain to create a market for itself. By learning from the retail chain, Riveras has used _____.

Accepted Answer

External benchmarking is the process of comparing one's business processes and performance metrics to industry bests or best practices from other companies. In this case, Riveras used the strategies of another successful retail chain, which is an example of external benchmarking.

Question 11

Qualitative forecasting uses _____ to predict future events.

Accepted Answer

Qualitative forecasting relies on the subjective opinions and insights of experts in a particular field. It does not utilize mathematical or statistical models, budgets, or surveys.

Question 12

_____ involves identifying several possible future situations or states of affairs and then making plans to deal with each situation should it actually occur.

Accepted Answer

Scenario planning involves identifying and planning for multiple possible future situations or states of affairs, whereas forecasting only predicts one likely future outcome. Staff planning deals with creating plans for the roles and responsibilities of employees, while external and internal benchmarking involve comparing performance to others in the industry or within the company, respectively.

Question 13

_____ are single-use plans that commit resources for specific time periods to activities, projects, or programs.

Accepted Answer

Budgets are plans that allocate resources for a specific period of time to activities or projects. Procedures, policies, and guidelines are all ongoing plans or rules that govern behavior, while forecasts are predictions of future trends or events and do not necessarily commit resources.

Question 14

The current issue of a popular business periodical predicted a global economic downturn. The periodical attributed the downturn to a predicted increase in the inflation rate. This report is an example of _____.

Accepted Answer

The report is an example of forecasting, which involves using past data and current trends to make predictions about future events or trends.

Question 15

_____ budgets allocate resources like labor, equipment, and space.

Accepted Answer

Nonmonetary budgets allocate resources such as labor, equipment, and space, focusing on non-financial aspects of resource allocation.

Question 16

The purpose of benchmarking is to _____.

Accepted Answer

Benchmarking is the process of comparing one's own performance, methods, and practices against those of other organizations in the same industry or market. The purpose of benchmarking is to identify the best practices and ideas of other organizations, and to learn from them in order to improve one's own operations. This can include incorporating new technologies or approaches, or simply improving existing business processes to become more efficient and effective.

Question 17

_____ refer to things done by people and organizations that enable them to achieve superior performance.

Accepted Answer

Best practices are methods or techniques that have been proven to be effective in achieving superior performance. They are identified through research and analysis of successful organizations and are adopted by others seeking to improve their performance.

Question 18

Which of the following is true about the use of staff planners?

Accepted Answer

The use of staff planners can indeed lead to a communication gap between those who plan and those who implement the plans. This is because staff planners may not always have direct involvement in the implementation phase, leading to potential misunderstandings or miscommunications regarding the execution of the plans they develop.

Question 19

Procedures are stated in employee handbooks and often called _____.

Accepted Answer

Standard operating procedures are often stated in employee handbooks as established processes for how tasks should be completed within a company. Bureaucratic procedures may have negative connotations and are not typically used to describe procedures stated in employee handbooks. Contingency and experimental procedures do not have the same level of predictability and consistency as standard operating procedures. Catalogued procedures is not a commonly used term in this context.

Question 20

Maria, a marketing manager at Kurt Consulting, predicts a 15% drop in the sales of their premium packages. She used correlation and regression analyses of previous years' sales records to arrive at the conclusion. Maria is using _____.

Accepted Answer

Maria is using quantitative forecasting by using correlation and regression analyses of previous years' sales records to make predictions about future sales.

Quiz 8: Planning Processes and Techniques