Limitations of planning

A currency crisis is an external and uncertain economic event. In exams connect foreign market crisis with external uncertainty.

The fixed rule is stopping the use of a better alternative. In exams treat ignored better alternative as rigidity.

Not allowing change in the annual plan shows lack of flexibility. In exams connect ignored local signal with rigidity.

Planning is economically justified only when benefit exceeds cost. In exams always check the cost benefit comparison.

An old survey does not show new preferences correctly. In exams connect outdated data with dynamic environment.

A plan gives targets but does not make results certain. In exams write despite planning failure as no guarantee.

Excessive instructions stop independent thinking. In exams treat manual dependence as initiative loss.

The governing concept is the limitation arising from uncertain assumptions about the future. Consumer income is an economic variable that influences purchasing power and demand. The company treated continued income growth as certain, but a recession changed the economic environment and reduced purchases. Consequently, the sales forecast and related production or expansion decisions became unreliable. Option B is correct because it identifies the root weakness: dependence on an uncertain economic assumption. Option A is not supported, since the company could still have clear objectives. Option C concerns organisational structure, not forecasting risk. Option D states a possible benefit and does not explain the fall in purchases. Good planning uses assumptions, but it must recognise that assumptions can change and should be reviewed periodically.

Government safety conditions are external legal factors. In exams treat new compliance cost as external legal change.

A viral trend is time sensitive and a rigid plan blocks opportunity. In exams connect trend delay with rigidity and dynamism.

Even a risk list cannot capture the future fully. In exams connect unexpected risk with uncertainty.

Excessive time allowed the competitor to take the first opportunity. In exams write delay plus competitor launch as time consuming limitation.

Sudden change in patient numbers is future uncertainty. In exams treat sudden demand surge as uncertainty.

A plan should change when social preferences change. In exams write eco friendly demand as dynamic social environment.

Lack of freedom reduces new thinking. In exams connect no autonomy with loss of initiative and creativity.

Applying one city's data to another can be a weak assumption. In exams write wrong data transfer as faulty assumption.

Fear of change stops improvement. In exams treat hidden improvement proposal as creativity limitation.

A port strike is an external operational risk. In exams write strike as an uncontrollable external event.

Rigidity is a limitation and clarifying objectives is a benefit. In exams keep limitation and importance separate.

Treating a plan as strong and not making alternatives is risky. In exams connect no backup with false security and uncertainty.