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Question

Albert David Ltd. with the objective of profit maximisation, has formulated a
comprehensive production plan by investing lot of funds and time. But, in the light of emerging
competition, company could not alter its plan as a lot of funds and time had already been
devoted in its formulation. This has adversely affected the profit maximisation objective of
Albert David Ltd.
Identify and explain the limitations of planning is reflected in above situation.

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Solution

Dear Student
The limitations of planning reflected in above situation are:
(i) Planning involves a huge cost in its formulation. As a lot of money needs to be spent in the collection, analysis, and interpretation of data.
(ii) Planning is a time-consuming process as it requires the collection of information, its analysis, and interpretation. It becomes a difficult exercise in times of unexpected emergencies.
Regards

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