Question

Explain the meaning of planning premises with example.

Answer 1

Planning is concerned with future, which is uncertain and every planner is using conjecture about what might happen in future. Therefore, the manager is required to make certain assumptions about future.

These assumptions are known as premises. Premises are the base, upon which plans are drawn. e.g. they may be forecasts, existing plans or past information. Forecasts can be made for demand for a particular product, changes in the tax rate, etc.