Fixed planning is for a certain length of time, such as four, five, six, or seven years. A set plan establishes certain goals that must be met within the plan period. Except in crises, physical goals and budgetary outlays do not vary. This strategy achieves the goals that were set forth in the plan. It does not try to beat the market by buying at low prices and selling at high prices. Instead, it tries to buy near the beginning of the planning period when prices are low and sell just before the end of the period when prices are high.
The advantage of this approach is that it requires little or no foresight. It can be applied to any situation where achievement of a goal within a given time limit is important, for example: building projects, research studies, or service contracts. Disadvantages include lack of flexibility and risk of over-committing resources/time/energy.
Fixed planning can be used by organizations when they know what they want to achieve by some date and how much resource they need to devote to this task. They may also know how much resource other people will need to achieve these goals. By setting fixed goals and determining how much resource will be required, organizations can prepare adequately for their activities.
For example, a university may choose to fix the amount of money it wants to spend on construction projects during a given period. It may also decide how many students should receive scholarships.
The plan provides the techniques and strategies for allocating resources to achieve the stated aims or goals. As a result, we can conclude that every plan must have a goal in order to be completed within a reasonable time frame and assure the plan's success.
Fixed Assets is a six-step process that begins with initiating and authorizing the request to purchase the asset and finishes with the ultimate disposal of the fixed asset after maintaining and depreciating it throughout its useful life. These processes are cyclical in nature, and the most of them take place within any fixed management lifetime. The only exception is Step 6 - Disposal of Fixed Assets - which can be accomplished at any time.
The fixed asset process consists of these steps: identify need for asset, decide on type of asset to be acquired, select a seller, negotiate price, pay for asset, receive asset, inspect asset, record initial acquisition cost, record subsequent sale costs, record depreciation, and finally dispose of asset.
A business needs assets to run its operations. Without these essential tools, businesses could not manufacture products or provide services to their customers. In addition, businesses use fixed assets for security, entertainment (such as cinema screens), and morale building (such as parks and sports facilities).
A fixed asset is any tangible property, including buildings and structural components such as roofs, heating, and air-conditioning systems, that is used by a company in its daily operations. Examples of fixed assets include production lines and other equipment, whether factory-made or custom-built. Personal items such as office furniture and computers are also considered fixed assets. However, people are not charged with depreciation unless they're employed by the company that owns the fixed assets.
Fixed costs that have been committed: These are long-term organizational investments that are difficult to modify. Investments in assets like as buildings and equipment, real estate taxes, insurance fees, and some top-level management salaries are examples of committed fixed costs. They cannot be eliminated from the business model entirely, because some level of investment will be necessary to maintain existing services and facilities.
Committed fixed costs must be included in the calculation of net profit or loss. They cannot be deducted immediately after they have been incurred. Instead, they should be reflected in the annual budget for the following year.
For example, if a company invests $10,000 in leased office space that will expire at the end of the year, there is no way to deduct this expense until the lease has been paid off through monthly rent payments. At that point, you could claim a rental deduction of $10,000 for the year. However, since the company failed to set aside any funds for this purpose, it would not have enough money left over at the end of the year to cover its expenses.
The company would need to come up with another way to pay for these expenses, like by raising its prices or cutting back on services. Either method would cause revenue to decrease, which would lead to lower profits.
A plan is generally any diagram or set of actions with specifics on timing and resources utilized to accomplish a goal. It is typically viewed as a temporal collection of intentional acts that will result in the achievement of a goal. The term may also be used to describe an outline of activities and their timing. For example, an employee might say that she has a lot of work to do this week's plan. Or, a manager might say that the plan for today was not implemented correctly.
The word "plan" comes from the Latin plantare, "to stand firmly," which in turn comes from the Greek πλάνη, plána, "a standing grain." Thus, a plan is a fixed intention of action.
In business, a plan indicates a clear strategy for achieving goals. A plan should include what needs to be done to achieve its goals. Without a plan, there is no way to know if you are on track to meet them.
People who manage plans are called plan managers or plan sponsors. They can be someone's job title if they have one; often, they are a person's position within an organization.
The following are the major points in the definition of planning: I Planning entails determining ahead of time what to accomplish and how to do it. (ii) It is a fundamental managerial role. (iii) Planning entails establishing objectives and devising a strategy to accomplish those objectives. (iv) Effective planning requires thinking through all aspects of a problem before developing a solution. (v) Good planners keep current on industry trends. They also learn from past mistakes.
II The term "planning" has different meanings for individuals, groups, and organizations. For individuals, it involves determining goals and priorities; for groups, it means agreeing on goals and strategies; and for organizations, it includes setting policies and procedures. However much responsibility an individual may have for planning, he or she cannot be expected to fulfill this role alone. Groups need not have formal planning departments to be effective, but they do need to communicate about their plans. Organizations that lack adequate resources to plan effectively should seek help from others who can provide guidance.
III Planning is important because it enables people to deal with problems before they occur. By considering possible scenarios and taking action accordingly, people can avoid difficulties altogether or at least minimize their impact if they do arise. This saves time and effort for everyone involved.
IV Planning helps leaders identify what needs to be done and how it can be accomplished within the limits of available resources.