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Unit 13: Control Techniques

• changes in the population Notes

• competition
• consumers’ income and tastes

• advertising and other sales promotion techniques
• after sales service
• credit terms offered.

(b) Production budget: expressed in quantitative terms only and is geared to the sales
budget. The production manager’s duties include:
• analysis of plant utilization

• work-in-progress budgets.

If requirements exceed capacity he may:
• subcontract

• plan for overtime
• introduce shift work
• hire or buy additional machinery

• The materials purchases budget’s both quantitative and financial.

(c) Raw materials and purchasing budget:
• The materials usage budget is in quantities.
• The materials purchases budget is both quantitative and financial.
Factors influencing (a) and (b) include:
• production requirements

• planning stock levels
• storage space

• trends of material prices.
(d) Labour budget: is both quantitative and financial. This is influenced by:
• production requirements
• man-hours available

• grades of labour required
• wage rates (union agreements)

• the need for incentives.
(e) Cash budget: a cash plan for a defined period of time. It summarises monthly receipts
and payments. Hence, it highlights monthly surpluses and deficits of actual cash. Its
main uses are:
• to maintain control over a firm’s cash requirements, e.g. stock and debtors

• to enable a firm to take precautionary measures and arrange in advance for investment
and loan facilities whenever cash surpluses or deficits arises

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