Question: What
do you understand by planning gap? discuss the relevance of planning gap in
industry analysis? Answers are written below:
Whenever
we talk about planning gap, the following comes to our mind.
1.
Sales forecasting
2.
planning per se
3.
present product
4.
production
objective
5.
new product
development
This is an estimate of sales, in monetary physical
units for a specific future periods under a proposed business plan or programme
and under an assumed set of economic and other an environmental forces
(planning premises) outside the business organization for which the forecast
and estimate is made. (imaga, 2000).
The forecast may be for a specified
items of merchandise (good and sales) or for an entire line of products. Sales
forecast is an important branch of economics.
2. Planning
Per se
There are various definitions of planning, though
planning is better explained than defined and for this reason, we will discuss
briefly about planning.
Planning is seen as a concept of
executive action that embodies the skills of anticipating influencing and
controlling the nature and direction of change.
3. Present
Products:- This is the product that the organization have at that
particular time it is the goods that is on sale for the organization. This is
the current products.
4. Production
Objectives: This is simply the
intents of the organization in producing the particular product. This is down
when the executive shall have forecast the business environment to know the
viability of the products.
5. Planning
Gap:- First and Foremost, “GAP” is seen as an error or an omission.
Planning gap is the sales forecast
of present product plus sales estimate of new product, therefore, this gap can
be seen as the opening between sales forecast of present plus sales estimate of
new product when related to provisional objectives. For a forecast to be
perfect, that gap that constitutes a barrier must be filled.
This job of filling this gap is done
mostly by the top management because, it could be a mistake made during the
initial broad plan of the organization or an error during the sales
forecasting.
THE RELEVANCE OF THE PLANNING GAP IN
INDUSTRY ANALYSIS
In every production industry,
planning gap is not relevant, because planning gap is of no positive use to the
organization, rather it is an omission which top management should work hard to
avoid.