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A study was conducted to examine the role of manufacturer and retailer characteristics in the joint determination of trade promotion budgets for supermarket brands. Findings indicate that manufacturers with formal trade promotion usually decrease allocation to off-invoices. Marketing policy implications are also discussed.

Small businesses have a tendency to rely on banks for financial services with their future relationships likely to follow the same pattern despite institutional and technological changes. Relationships between banks and firms remain an important factor in distributing financial services but questions on their structure remain as technological and institutional changes are continuously evolving.

The author studies the optimality of advertising pulsing under the assumption that demand follows a discrete and interpretable Markov process and that the advertising budget is constrained. The author develops two main results. First, when pulsing is optimal, the prevalence of advertising effects on switching or repurchasing affects the length of the pulse (shorter versus longer, respectively), as well as the optimal level of advertising. Second, the author identifies the functional forms of the short- and long-term effects of advertising in the discrete Markov process and shows that pulsing can be optimal if the transition probabilities are concave in advertising. As an alternative to a pure Markov carryover (if any), the author considers that carryover effects of advertising also might be caused by accumulation of memory for the advertisement. Although general results are difficult to obtain, the author analyzes one case of the compound dynamics of the Markov process and memory effects for advertising with results similar to the pure Markov process. Similarities and differences with continuous-time models, as well as managerial implications, are discussed. (Reprinted by permission of the publisher.)

The use of risk adjusted discounted rates (RADR) in capital budgeting is a common corporate practice. While it is generally accepted that that the correct use of the RADR technique will yield the proper result, there is considerable disagreement over what is considered the correct use and especially over the correct tool for discounting negative-value cash flows such as expenses. Scholars are in long-standing disagreement as to whether the risk adjusted discount rate applied to future negative-value cash flows in capital budgeting should increase or decrease as the risk of the cash flow increases. An analysis of capital budgeting within a portfolio model is suggested that will resolve this disagreement.

The legacy of budgetary reform has been dismal Promising options, rooted in economic values, seem to fall short when confronted with political realities. Nevertheless, the search continues. The authors argue [...]

Service enterprises can compute for their advertising budget using the percentage of sales approach. This method incorporates traditional advertising budgeting with benchmarking techniques. It allows companies to view their operations and their competitiveness on a wider scale before computing for the budget. The method also reflects related factors such as the political realities of the enterprise.

The use of functional budgeting and inappropriate management techniques on development projects often cause problems such as low-quality products or results, runaway costs and poorly motivated work groups. Functional budgeting differs from project budgeting in terms of repetitiveness, basis, risk and type of budget. Managers should keep in mind these differences in development projects. Assuming that other management variables are under control, the appropriate budgeting approach ensures that projects are delivered on time and within budget.

Budget Control Many wholesalers shudder when they hear the word 'budget.' Is the beer wholesaling industry ready for budgeting? The answer is yes. The unfortunate fact is that less than [...]

A budget is an agreed plan establishing, in numerical or financial terms, the policy to be pursued and the anticipated outcomes of that policy. Budgets are usually stated in terms […]

Evidence suggests that the major reasons for business failure include the following: poor cashflow management; lack of effective market research; lack of skills needed to run a business; failure to […]

Byline: Matthew Josefowicz In insurance technology, it often seems that the more things change, the more they stay the same. Despite the rapid changes in technology across the economy, the [...]

Byline: Carrie Burns Either I've been involved in insurance just long enough or there really are exciting things happening in the industry. Granted, I'm not the average insurance professional with [...]

Plenty of planners have been asked to do more with less--most notably, less money--but saving dollars isn't always about being frugal; sometimes it's about freeing up some cash to make [...]

In a clear indication of how much time and money financial institutions are devoting to governance, risk management and compliance (better known by its acronym GRC), in todays turbulent economy, [...]

Our study uncovers how much money companies spend to send sales professionals around the world--and how those travelers feel about their mobile lives WHAT DOES A business trip cost? It […]

Implementing a strategic budgeting system can save managers time and headaches We've survived Y2K with few glitches, implemented powerful Enterprise Resource Planning (ERP) systems, and have become one of the [...]

This month we'll create the Schedule of Cash Payments for the Direct Materials (DM) Budget. This entails creating a new table and a series of queries to load the table [...]

HR departments are under siege, according to the TP track survey from Towers Perrin. As per the survey respondents report HR budgets have either decreased or held steady since 2001, with only 22 percent reporting an increase in overall budget.

Hospitals must budget by DRGs, payers Controlling resources in a hospital once meant power--the power of the budget. But as hospital budgeting begins the slow process of adapting to reimbursement [...]

Decision-tree analysis has commonly been used to solve capital budgeting problems involving sequential selection among mutually independent projects. However, an alternate approach has computerational and analytical advantages over the decision-tree method. In the case of three sequential projects, over 90% of the computations required for the decision-tree analysis are not needed. Also, the alternative approach allows the decision maker to intuitively visualize the rationale underlying the decision process from the solution.

Technological innovations must be cost-justified by managerial accountants prior to making capital expenditures. The cost justification process (cost-benefit analysis) consists of two responsibilities for the accountant: developing budget guidelines, and ensuring expenditures fall within budgetary constraints. The capital budgeting and expenditure assessment process is explained from the standpoints of investment analysis and options approaches for accountants in manufacturing environments. Models are developed that classify benefits achievable from technological change according quantifiability. Among the many suggestions to accountants responsible for cost-justifying capital investments are: (1) existing production methods should be reviewed for possible improvement before purchasing new production systems, (2) management's (and engineering's) desire for strategic leadership within the industry should not be allowed to overrule financial responsibility, and (3) capital investment decision processes should involve staff supervisors and line managers to minimize purchases of unneeded systems.

The process of budget-making is evaluated in terms of its effects on managers' performance and job satisfaction. A model is devised in which role ambiguity influences budget creation and the results of the budget-making. Job performance and job satisfaction are shown to be indirectly affected by role ambiguity in the process of budget-making. Of the two, job satisfaction is more significantly affected than job performance. Budgetary participation by managers decreases their role ambiguity.

Government and private organizations are constrained by the scarcity of resources. As a result, organizations develop budgets to allocate their resources among alternative uses. Budgets serve as a financial plan [...]

During the past 12 years, the 200 largest companies in the United States have reduced finance costs by a third. Lean principles are decreasing costs and increasing the importance of the finance function. Companies need to develop internet policies for the workplace, and replace annual budgets with continual forecasting. Information technology (IT) employers and vendors must assume more responsibility for delivering an IT stress-free environment to the workplace.

`Traditional budgeting is seriously out-of-tune with today's business needs but the solution is not to change the budgeting system. Instead, companies must develop their management processes towards what is becoming [...]

The reduction of overheads as an effective cost-control measure requires a careful review of the cost base of an organization. Critical to the success of the cost reduction review are the elimination of specific activities or the use of more cost-efficient techniques in the implementation of these activities within the budget process. An examination of the budget process, particularly at the planning stage, may show any of a number of inadequacies in the process, such as in strategic plan linkages, challenging the initial cost base, allocations, bureaucracy, gamesmanship, and budget detail. Activity analysis is suggested as an approach to effectively reducing overheads by veering away from traditional accounting approaches and using detailed analysis on overhead.