2. Key Elements and Processes

Levels of Planning Decisions

Organizations have multiple levels of operations planning decisions, beginning with the strategic plan, which serves to drive progressively lower level decisions. The top-level plan is the strategic business plan, with its long-term focus, which provides a company’s direction and objectives for the next two to ten years. The strategic business plan is normally updated and reevaluated annually. It states the company’s objectives for profitability, growth rate, and return on investment. These objectives are then used to guide lower level decisions.

The relationship between these plans is shown in Figure 2-1.

Figure 2-1 Hierarchy of business plans

The strategic business plan drives ...

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