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Planning horizon

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Definition of Planning horizon

Planning Horizon Image 1

Planning horizon

The length of time a model projects into the future.


planning horizon

Time horizon for a financial plan.



Related Terms:

Relevant range

The upper and lower levels of activity within which the business expects to be operating within the short-term planning horizon (the budget period).


Aggregate planning

A budgeting process using summary-level information to
derive various budget models, usually at the product family level.


Corporate financial planning

Financial planning conducted by a firm that encompasses preparation of both
long- and short-term financial plans.


enterprise resource planning (ERP) system

a packaged software program that allows a company to
(1) automate and integrate the majority of its business processes,
(2) share common data and practices across the entire enterprise, and
(3) produce and access information in a realtime environment



Enterprise resource planning system

A computer system used to manage all company
resources in the receipt, completion, and delivery of customer orders.


Estate Planning

An insurance program designed to provide funds for insured's dependents upon death of the insured, and to also conserve, as much as possible, the personal assets that the insured wants to bequeath to heirs.


Planning Horizon Image 2

Financial planning

The process of evaluating the investing and financing options available to a firm. It
includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in
the form of a financial plan, and then comparing future performance against that plan.


Floor planning

Arrangement used to finance inventory. A finance company buys the inventory, which is then
held in trust by the user.


Horizon analysis

An analysis of returns using total return to assess performance over some investment horizon.


Horizon return

Total return over a given horizon.


Horizontal acquisition

Merger between two companies producing similar goods or services.


Horizontal analysis

The process of dividing each expense item of a given year by the same expense item in
the base year. This allows for the exploration of changes in the relative importance of expense items over time
and the behavior of expense items as sales change.


Horizontal merger

A merger involving two or more firms in the same industry that are both at the same
stage in the production cycle; that is two or more competitors.


Horizontal spread

The simultaneous purchase and sale of two options that differ only in their exercise date.


Manufacturing resource planning

An integrated, computerized system for planning
all manufacturing resources.


Planning Horizon Image 3

manufacturing resource planning (MRP II)

a fully integrated materials requirement planning system that involves
top management and provides a basis for both strategic
and tactical planning


Manufacturing resource planning (MRP II)

An expansion of the material requirements planning concept, with additional computer-based capabilities in the areas of
direct labor and machine capacity planning.



Material requirements planning

A computerized system used to calculate material
requirements for a manufacturing operation.


Material requirements planning (MRP)

A computer-driven production methodology
that manufactures products based on an initial demand forecast. It tends to result in
more inventory of all types than a just-in-time (JIT) production system.


Materials requirement planning

Computer-based systems that plan backward from the production schedule
to make purchases in order to manage inventory levels.


materials requirements planning (MRP)

a computerbased information system that simulates the ordering and
scheduling of demand-dependent inventories; a simulation
of the parts fabrication and subassembly activities that are
required, in an appropriate time sequence, to meet a production
master schedule


planning

the process of creating the goals and objectives for
an organization and developing a strategy for achieving
them in a systematic manner


Planning, programming and budgeting system (PPBS)

A method of budgeting in which budgets are allocated to projects or programmes rather than to responsibility centres.


strategic planning

the process of developing a statement of
long-range (5–10 years) goals for the organization and
defining the strategies and policies that will help the organization
achieve those goals


tactical planning

the process of determining the specific
means or objectives by which the strategic plans of the
organization will be achieved; it is short-range in nature
(usually 1–18 months)



 

 

 

 

 

 

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