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Inappropriate standards (or targets):
This is a problem arising from deficiencies in planning. If not enough time and resources are devoted to setting accurate standards in the first place, and if they are not kept up to-date, subsequent performance is highly likely to deviate from what was expected.
Mis-measurement of actual results: Scales may be misread, the pilfering of wastage or materials may go unrecorded, items may be wrongly classified (as material X3 say, when material X8 was used in reality), or employees may make ‘cosmetic’ adjustments to their records to make their own performance look better than it really was.
Implementation breakdown:
This means that for a variety of causes employees will not always implement the plan in the way that was intended. The classic example is the purchase of raw materials at a lower than budgeted price, causing quality problems for production. Such problems may arise whether employees act with the best intentions or whether they deliberately take their own course because they do not agree with the plan. They may also be caused by poor communications or inadequate training.
Transition probabilities These are the probabilities of moving from one state to another in the next time period. Usually they are written in the form of a probability matrix.
Graphic method of break even analysis or break even chart The break even point can also be computed graphically. A break even chart is a graphical representation of marginal co
Markov Chains: Markov Chains are named after the Russian statistician A.A Markov who developed probabilistic models that are often applicable to decision making problems in bu
The Value Chain and Cost Analysis The behavior of a firm's costs and its relative cost position stem from the value activities the firm performs in competing in an industry. A me
Explain about Programmed budget It having expects revenues and cost of various products or projects that are termed as the main programmers of the firm. Such a budget can be pr
FOR each of the following cases, indicate why management and the auditors determined that control deficiency was a material weakness. Case1. In our assessment of the effectiveness
Accounts Payable Turnover Ratio is a short-term liquidity measure which is used to calculate the rate at which a company pays off its suppliers. Accounts payable turnover ratio is
identify and explain the many classification of costs for planning, control.performance evaluation and decision making.
Advantages of zero base budgeting 1) it provides a basis for evaluating decision packages on the basis of benefit considerations 2) it reduces inefficiency and achieves high
Constraints 1) A constraint of the type ≤ (≥) can be converted to an equation by adding a slack variable to (subtracting a surplus variable form) the left side of the constrain
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