Planning process

The correct answer is A, developing premises. Planning premises are assumptions or forecasts about future conditions that may influence the plan. Here, a possible rise in the interest rate is a future economic assumption; it can affect borrowing cost, investment returns, cash flow and the choice of a financing method. Managers use such premises before comparing and selecting alternatives, so that the plan is realistic under expected conditions. Option B would mean choosing one investment route after alternatives had been evaluated. Option C means carrying out the selected investment plan, while D means checking results and correcting deviations after implementation. The statement does not describe any of those later activities. It specifically highlights an assumption about the future, making A correct.

Different distribution channels are ways to achieve the target. In exams understand different channels as alternatives.

Checking least cost is done in evaluation of alternatives. In exams treat least costly comparison as evaluation.

The chosen distribution channel is the selected alternative. In exams connect chosen channel with selection.

Actually beginning to dispatch goods according to the selected plan is implementation of the plan. At this stage, the decision is converted into action. Evaluating alternatives occurs before selecting a plan, while setting objectives is an initial step. Exam tip: Words such as starting work, issuing orders, or putting a plan into action usually indicate implementation.

Improvement after customer feedback happens in follow up. In exams write feedback after implementation as follow up.

Planning starts with objectives and then premises come. In exams remember the initial sequence objectives premises alternatives.

Future assumptions are developed after objectives. In exams treat next after objective as premises.

An estimate about customer preference is a future premise. In exams write customer preference assumption as premises.

The correct answer is B, identifying alternative courses of action. Management has stated two possible ways of reducing cost: replacing machines and improving the process. At this stage, the alternatives have been generated or listed, but no one option has yet been judged superior or put into practice. Evaluation would come next, when managers compare the two methods using criteria such as cost, expected saving, feasibility, time and risk. Implementation would mean carrying out the selected method, and follow-up would mean checking actual results after it has been used. The wording “two ways are kept” shows that possible courses are being identified, not evaluated or selected. Therefore B is the precise answer.

Comparison of two alternatives is evaluation. In exams write comparison of alternatives as evaluation.

The option adopted after comparison is selection. In exams treat adopted after comparison as selection.

Starting training turns the plan into action. In exams treat programme starts as implementation.

Checking performance after training is follow up. In exams write after training review as follow up.

Targets with number and time come under objectives. In exams understand measurable and time based target as objective.

Planning premises are assumptions or forecasts about future conditions on which plans are based. The possibility that demand may rise next year is an assumption about the future, so it is a planning premise. Setting a profit target is an objective, while reviewing results is part of the controlling process. Exam tip: Look for words showing an assumption, forecast, or expected future condition to identify a planning premise.

Writing available alternatives is identifying alternatives. In exams call available alternatives list identifying alternatives.

After comparison the option is selected first and then action happens. In exams remember selection after evaluation.

Supporting plans help in implementation. In exams connect budgets and programmes with implementing the plan.

Correcting after seeing low progress is follow up action. In exams treat corrective steps after progress review as follow up.

After objectives and premises alternatives are searched. In exams remember identifying alternatives as the third step.

Comparison of profit and safety is evaluation. In exams write profit safety comparison as evaluation.

Finalising the better option is selection. In exams treat finalised better option as selection.

The correct answer is D, implementing the plan. Planning produces decisions and instructions, but implementation is the stage at which those decisions are converted into actual organisational activity. Managers communicate the selected course, assign responsibilities, release resources, coordinate departments and start the scheduled work. Setting objectives only states the desired result. Identifying alternatives lists possible methods, while developing premises makes assumptions about the future environment. All three occur before the chosen plan is executed. Follow-up, although not an option here, would occur after implementation to compare actual performance with objectives and correct deviations. The phrase “real work starts” directly describes movement from a written plan to action, so D is unambiguous.

The target is objective and availability estimate is premise. In exams treat target plus assumption as the first two steps.