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Edexcel A Level Business Your notes

3.3 Decision-making Techniques

Contents
3.3.1 Quantitative Sales Forecasting
3.3.2 Investment Appraisal
3.3.3 Decision Trees
3.3.4 Critical Path Analysis

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3.3.1 Quantitative Sales Forecasting

Your notes
Introduction to Quantitative Sales Forecasting
The sales forecast is an important business planning tool
It provides an estimation of future sales figures using past data and considering predictable
external factors

Sales forecasts can be used to identify trends in product sales which can then be compared with the
market as a whole

Main Methods used in Quantitative Sales Forecasting

Method Explanation

Moving Averages
A series of averages calculated from successive segments of a series of
data
These averages smooth data so that trends may be more easily identified

Extrapolation
The prediction of future sales from past data
Extrapolation can often be done simply by extending a line of best fit

Correlation
Where there is a link between two variables there is a correlation
Correlations may be positive or negative

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Calculation of Time-series Analysis

Moving Averages Your notes
Sometimes past sales data is too erratic for clear trends to be identified
A moving average smoothes raw data and allows analysts to spot patterns even when sales are
subject to seasonal variations
Four-month or twelve-month moving averages are used where seasonality is a key factor in sales

Steps to calculate the moving average

The moving total is calculated by adding together sales figures for a specified number of periods
E.g. A three-month moving total is calculated by adding the first three months, followed by the
second three months, and the third three months etc.

The centred average is calculated by dividing the moving total by the specified number of periods
E.g. A three-month centred average is calculated by dividing the three month moving total by
three

A series of centred averages is known as the moving average

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Worked example
Your notes
RJ Inflatables is a manufacturer of novelty celebration balloons. Its monthly sales from January to July
are shown in Table A.
Rachel Jameson, the managing director, is concerned that sales are declining but is struggling to
identify a trend with the sales data she has available. Rachel’s financial administrator has suggested
using a moving average so that she can forecast future sales with greater accuracy.
Table A

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Calculate a three-month moving average using RJ Inflatables January to July sales data. (6)
Step 1 - Calculate a three-month moving total of sales for each group of three months: Your notes

Step 2 - Calculate the three-month centred average for each group of three months

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Your notes

When plotted on the same graph the 3-month centred average provides a smoother curve which
makes extrapolation of the data for forecasting relatively straightforward

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Your notes

A comparison of raw sales data and 3-month centred average data

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Interpreting Scatter Graphs

Scatter graphs allow businesses to compare two variables such as sales volume and advertising to Your notes
establish if there is any correlation between them

An example of a scatter graph showing the number of sales managers employed by a business and the
volume of Items sold
Types of correlation
A correlation exists where there is a relationship or connection between two variables
A positive correlation means as one variable increases, so does the other variable
A line of best fit that slopes upwards can be identified
A negative correlation means as one variable increases, the other variable decreases
A line of best fit that slopes downwards can be identified
No correlation means there is no connection between the two variables

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It is not possible to identify a line of best fit

Your notes

The main types of correlation between two variables

Correlation does not always indicate a relationship or causation between two sets of variables so
businesses need to conduct research to establish whether a relationship exists as well as the
strength of that relationship
Where a line of best fit can be identified and when causation is determined, a business can
extrapolate the data to make predictions around changes to either of the variables
E.g. extrapolation the line of best fit in the example below, the business could predict that
employing seven sales managers would be result in likely sales of 46 units
Extrapolation assumes that what has happened in the past will be the same as what will happen in the
future

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Your notes

An example of a scatter graph with a line of best fit showing the number of sales managers employed by
a business and the volume of items sold

Exam Tip
When drawing a line of best fit you should try to include as many data points above the line as below
the line.
Watch out for outlying data - if there is more than one outlier above the line, adjust your line of best fit
upwards. Similarly, if there is more than one outlier below the line, adjust your line of best fit
downwards. Just one outlier should not influence your line of best fit.

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Limitations of Quantitative Sales Forecasting

Quantitative sales forecasting techniques are useful where the future is expected to reflect what has Your notes
happened in the past
It is especially effective in the short term
In the longer term, uncertainties - especially in the external environment - can make simple
extrapolation of past data unreliable

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Examples of external factors that may influence the accuracy of the sales forecast
Your notes
In many cases the sales forecast can provide little more than an estimate of future performance
As long as it is approximately accurate businesses can use the sales forecast to plan resources
such as staff, finance and production and to produce budgets

Businesses can improve the accuracy of sales forecasts by

Conducting detailed market research
Employing experts with excellent market knowledge
Revising the sales forecasts frequently
Forecasting for the short- to medium-term

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3.3.2 Investment Appraisal

Your notes
An Introduction to Investment Appraisal
Investment appraisal involves comparing the expected future cash flows of an investment with the
initial outlay for that investment

A business may want to analyse

How soon the investment will recoup the initial outlay
How profitable the investment will be

Before an investment can be appraised key data will need to be collected, including
Sales forecasts
Fixed and variable costs data
Pricing information
Borrowing costs

The collection and analysis of this data is likely to take some time
It requires significant experience to interpret the data appropriately before the investment
appraisal can take place

Different methods are used to appraise the value of an investment, including:

The simple payback period
The average rate of return (ARR)
The net present value of discounted cash flow

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Simple Payback Period

The payback period is a calculation of the amount of time it is expected an investment will take to pay Your notes
for itself
Where net cash flows are expected to be constant over time the payback period can be calculated
using the formula

Initial Outlay
= Years / Months
Net Cash Flow per Period

Worked example
1. Simple Payback Calculation
Gomez Carpets is considering an investment in a new storage facility at a cost of £200,000. It
expects additional net cash flow of £30,000 per year as a result of the investment.
Calculate the Payback period for the investment. (3)
Step 1 - Divide the initial outlay by the additional expected net cash flow

£ 200,000
= 6 . 67 years (1 mark)
£ 30,000
Step 2 - Convert the outcome to years and months
6 years
0.67 years = 8.04 months (1 mark)
Payback period = 6 years and 8 months (3 marks for the correct answer)

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Worked example
Your notes
2. Payback calculation for varying cash flow over time

Hammer and Son provides a household repairs service that has recently employed a new
handywoman who requires her own van. The new van will be purchased for £32,000
The net cash flows are expected to vary over the five years following its purchase and are shown in the
table below.

Year Net cash Flow (£) Cumulative Cash Flow (£)

0 (32,000) (32,000)
1 14,000 (18,000)
2 10,000 (8,000)
3 6,000 (2,000)
4 3,000 1,000
5 2,000 3,000

Calculate the payback period for the van (4)

Step 1 - Identify the final year where the cumulative cash flow is negative
In this case the cumulative cash flow figure is -£2,000 at the end of Year 3
This is the remaining amount (outlay) outstanding. (1 mark)

Step 2 - Calculate the monthly net cash flow for the next year
£3,000 ÷ 12 (months) = £250 (1 mark)

Step 3 - Divide the remaining outlay outstanding by the monthly net cash flow
£2000 ÷ £250 = 8 months (1 mark)

Step 4 - Identify the payback period

In this case the Payback period is 3 years and 8 months (1 mark)

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Benefits and Drawbacks of the Using the Payback Method

Your notes

Benefits Drawbacks

It is a simple method to calculate and It provides no insight into the profitability of

understand investments

It is particularly useful for businesses where the Payback only considers the total length of time
cash flow management is vital to recover an investment

Businesses can identify the point at which an Neither the timing nor the future value of cash
investment is paid back and contributing inflows is considered
positively to cash flow
It may encourage a short-termism approach
It is also useful where new technology is
introduced regularly Potentially lucrative investments may be
dismissed as they take longer to pay back than
Businesses purchasing equipment can calculate alternatives
whether an investment ‘pays back’ before an
upgrade is available

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Average Rate of Return (ARR)

The Average Rate of Return compares the average profit per year generated by an investment with the Your notes
value of the initial outlay
The average rate of return is calculated using the formula
average annual return
× 100
initial outlay

The outcome of the formula is expressed as a percentage which makes it easy to compare different
investment options

Worked example
Creative Frames, a small artwork framing business, is considering an investment of £40,000 in new
machinery. Megan, the business owner, believes that total cash inflows over a 6-year period will be
£140,000 and total cash outflows will be £92,000.
Calculate the Average Rate of Return of the proposed investment. (4 marks)

Step 1 - Calculate the total profit over the lifetime of the investment
Total cash inflows - Total cash outflows = Total profit
£140,000 - £92,000 = £48,000 (1 mark)

Step 2 - Divide the total profit by the number of years of the investment project to find the average
annual profit
£48,000 ÷ 6 year = £8,000 (1 mark)

Step 3 - Divide the average annual profit by the initial outlay

£8,000 ÷ £40,000 = 0.2 (1 mark)

Step 4 - Multiply the outcome by 100 to find the percentage

0.2 x 100 = 20% (1 mark)

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The Advantages & Disadvantages of Using the Average Rate of Return (ARR)
Your notes
Advantages Disadvantages

It considers all of the net cash flows As it depends on an average of cash flows it
generated by an investment over time ignores the timing of those cash flows

It is easy to understand and compare the The opportunity cost of the investment is ignored
percentage returns with each other as values are nether expressed in real terms nor
adjustments made for the impact of interest rates
and time

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Net Present Value of Discounted Cash Flow

Net Present Value (NPV) is a financial metric used to evaluate the value of an investment or a project Your notes
The NPV of an investment takes into account the effects of interest rates and time
It represents the present value of the future cash inflows minus the present value of the future
cash outflows
To get the present value, the future value has to be discounted (reduced)

This discounting method takes into account the:

The fact that that money received in the future is worth less than money received today due to
inflation
The opportunity cost of not having the money available for other uses

To calculate the Net Present Value of an investment the value of all future net cash flows in today’s
terms need to be calculated first - and then discounted using a table
The cost of the initial investment is deducted from the total of the discounted net cash flows
If future net cash flows minus the initial investment is positive, then the investment is likely to
be worthwhile
If the sum of future net cash flows minus the initial investment is negative, then the investment
is unlikely to be worthwhile

Discounted cash flows are calculated using discount tables which allow future cash flows to be
expressed in today’s terms

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Worked example
Your notes
Brownsea Sightseeing Tours Ltd is considering purchasing a new pleasure craft at a cost of £325,000.
It expects the investment to achieve the following net cash flows over five years of operation

Year Net cash Flow (£) 10% Discount Factor

0 (325,000) 1.00
1 110,000 0.91
2 90,000 0.83
3 75,000 0.75
4 65,000 0.68
5 60,000 0.62

Using the 10% discount factor calculate the NPV of the leisure craft investment. (4 marks)

Step 1 - Calculate the discounted cash flow for each year by multiplying the net cash flow by the
discount factor

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Your notes

(2 marks)

Step 2 - Add together the discounted cash flow values for each year, including Year 0 £325,000 +
£100,100 + £74,400 £56,250 + £44,200 + £37,200
= (12,550)
The Net present Value of the investment is -£12,550. This suggests that the investment in the new
pleasure craft is not financially worthwhile. (1 mark)

Advantages and Disadvantages of the Net Present Value Method

Advantages Disadvantages

It considers the opportunity cost of money It is more complicated to calculate and

Discount tables are used to calculate forecast interpret than other methods of investment
future values of net cashflows appraisal

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Businesses may choose different discount One of the primary challenges of using the NPV
tables (20%, 10%, 5% etc) to adjust the level of method is accurately forecasting future cash
risk involved in a project allowing a range of flows Your notes
scenarios to be considered
Selecting an appropriate discount rate can be
challenging, and even small changes in the
discount rate can significantly impact the
calculated NPV

The NPV method only considers the financial

costs and benefits of a project and does not
account for non-financial benefits or costs e.g
environmental damage

Exam Tip
A common error made by students is the assumption that discounted cash flow takes into account the
effects of inflation on investment decisions. To account for inflation, the discount rate used in the NPV
calculation should be adjusted to reflect the expected inflation rate.

Limitations of Investment Appraisal Techniques

Each of the investment appraisal techniques relies upon forecasted future cash flows which may lack
accuracy
Managers compiling cash flow forecasts may lack experience or may be biased towards a
particular investment
Incomplete past data may make forecasting imprecise or mean that confidence in the data used
to compile the forecast is limited

Long-term cash flow forecasts can be inaccurate for several reasons

Unexpected increases in costs
The arrival of new competitors
Changes in consumer tastes
Uncertainties due to economic growth or recession

Factors other than the cost of investment and the return on investment are not considered
Business finances and availability of external finance to fund the investment
The overall corporate objectives
Potential for positive public relations or meeting social responsibilities

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3.3.3 Decision Trees

Your notes
Decision Tree Diagrams
A decision tree is a quantitative method of tracing the outcomes of a decision so that the most
profitable decision can be identified
Research-based estimates and probabilities are used to calculate likely outcomes
The net gain from a decision can be identified and used to consider whether an investment is
worthwhile

Using decision trees provides several key advantages to the decision making process
Constructing a decision tree diagram may reveal options that haven't previously been considered
Managers are forced to consider the risks associated with their choice, ahead of implementation
The quantitative approach requires deep research to be carried out

Decision Tree Diagrams

The key elements in a decision tree diagram are
Decision points
Outcomes
Probabilities
Expected monetary values

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Your notes

A simple decision tree based on a choice of whether to invest in opening a new store or expand its
website
Points where decisions need to be made are represented by squares
Square A represents the fact that a choice is required on opening a new store or expanding the
website

Points where there are different outcomes are represented by circles called nodes
Circles B and C represent points at which the different options have a range of outcomes -
success or failure

The probability or likelihood of each outcome is shown on the diagram

A certain outcome has a probability of 1

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An impossible outcome has a probability of 0

Opening a new store has a 0.7 probability of success and a 0.3 probability of failure
Expanding the website has a 0.6 probability of success and a 0.4 probability of failure Your notes

The monetary value of each decision is based on the expected profit or loss of the outcome
If opening a new store is successful a £420,000 profit is expected
If opening a new store is unsuccessful a £24,000 loss is expected
If expanding the website is successful a £480,000 profit is expected
If expanding the website is unsuccessful a £32,000 loss is expected

Calculating Expected Monetary Values

To compare the options a business should take into account the expected values of each decision
presented in the decision tree diagram

To calculate the expected monetary value of a decision, the following formula is used
(Expected value of success x Probability) + (Expected value of failure x Probability)

Using the example above the expected value of opening a new store is
(£420,000 x 0.7) + (-£24,000 x 0.3)
= £294,000 + -£7,200
= £286,800

Using the example above the expected value of expanding the website is
(£480,000 x 0.6) + (-£32,000 x 0.4)
= £288,000 + -£12,800
= £275,200

As the expected value of opening a new store is higher at £286,800, than that of expanding the
website at £275,200, based purely on financial terms the business should choose the option to open a
new store

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Worked example
Your notes
Caramelac is a lactose-free chocolate product manufactured by a large multinational confectionery
business. In recent years increased competition from other well-known brands has started to impact
on sales of the product and managers are determined to maintain Caramelac’s market share.

Market research has shown that the business has two options:
a) Redevelop the product
b) Create a new advertising campaign

The expected outcomes and the probabilities of success and failure are shown in the decision tree
below

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Calculate the expected values of each option and decide, on financial grounds, which option the Your notes
Caramelac's brand managers should choose. 6 marks)

Step 1 - Calculate the expected value of redeveloping the product

(£840,000 x 0.5) + (-£84,000 x 0.5)
= £420,000 + -£42,000
= £378,000 (2 marks)

Step 2 - Calculate the expected value of the advertising campaign

(£660,000 x 0.6) + (-£76,000 x 0.4)

= £396,000 + -£30,400
= £365,600 (2 marks)

Step 3 - Interpret the outcomes and make a decision

As the expected value of redeveloping the product is higher at £378,000 than that of the
advertising campaign at £365,600 (1 mark), the business should choose the option to
redevelop the product (1 mark).

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Worked example
Your notes
In some cases the decision tree diagram provides expected revenues rather than profit or loss
for the range of outcomes
In these diagrams the costs related to each outcome are also provided
To calculate the expected value of each outcome costs must be deducted from expected
revenues

A decision tree based on a decision whether to launch a new product or improve an existing
product

To calculate the expected monetary value of a decision where revenues and costs are included in
the diagram
(Expected value of success x Probability) + ( Expected value of failure x Probability) -
Cost

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The expected value of launching a new product is Your notes

(£520,000 x 0.6) + (-£54,000 x 0.4) - £280,000
= £312,000 + -£21,600 - £280,000
= £290,400 - £280,000
= £ 10,400

The expected value of improving the existing product is

(£225,000 x 0.9) + (-£22,000 x 0.1) - £190,000
= £202,500 + -£2,200 - £190,000
= £200,300 - £190,000
= £ 10,300

As the expected value of launching a new product is marginally higher at £10,400 than that of
improving the existing product at £10,300, the business should choose the option to launch a new
product

In this case the decision tree has demonstrated that there is little between the two options and
the business should look at other factors that may inform their decision

Exam Tip
Expected values are not the same thing as profit or revenues generated by a choice. In the above
example, launching a new product is expected to either generate a positive revenue figure of
£520,000 or generate a negative revenue figure of £54,000. It is never forecast that a revenue figure
of £200,300 will be achieved. This is purely a figure used in making the choice between this option and
the alternative and does not represent the actual amount of revenue that is expected to be achieved.

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Limitations of Using Decision Trees

Constructing decision trees that can support effective decision-making require skill to avoid bias and Your notes
take significant amounts of time to gather reliable data
A decision tree is constructed using estimates which rarely take full account of external factors and
cannot include all possible eventualities
Qualitative elements such as human resource impacts are not considered which may affect the
probability of success of a decision
The time lag between the construction of a decision tree diagram and the implementation of the
decision is likely to further affect the reliability of the expected values

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3.3.4 Critical Path Analysis

Your notes
The Nature & Purpose of Critical Path Analysis
Critical path analysis is a project management tool that uses network analysis to plan complex and
time-sensitive projects
Critical Path Analysis involves the construction of a visual model of the project that includes key
elements
A list of all activities required to complete the project
The time (duration) that each activity will take to complete
How each project activity depends on others

Critical Path Analysis shows

The order in which activities must be completed
The longest path of project activities to the completion of the project
The earliest and latest that each project activity can start and finish without delaying completion
of the project as a whole
Activities within a project that can be carried out simultaneously are identified
The critical project activities which if delayed will cause the project as a whole to over-run
Those project activities where some delay is acceptable without delaying the project as a whole
The shortest time possible to complete the project

It allows managers to identify the relationships between the activities involved and to work out the
most efficient way of completing the project
Resources such as raw materials and components can be ordered or hired at precisely the right
time they are needed
Working capital may be managed efficiently
Where delays occur managers can identify the implications for the project’s completion and
redirect resources if required

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Drawing Critical Path Analysis Diagrams

The Main Components of Network Analysis Diagrams Your notes

Element Description

Node A node is a circle that represents a point in time where an activity is started or
finished
The node is split into three sections
The left half of the circle is the activity number
The top right section shows the earliest start time (EST) that an activity can begin
based on the completion of the previous activity
The bottom right section shows the latest finish time (LFT) by which the previous
activity must be completed

Activities An activity is a process or task within a project that takes time

Activities are shown on the network diagram as a line which link nodes
A description of the activity or a letter representing the activity is usually shown
above the line

Duration The duration is the length of time it takes to complete an activity

The duration is shown as a number of time units such as hours or days below the
activity line

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Your notes

An example of a simple network diagram showing key elements

A network diagram must always start and end on a single node

Lines must not cross and must only be assigned to activities

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Critical Path Calculations

Calculating Earliest Start Times Your notes

An example of a simple network diagram showing Earliest Start Times

Working forwards from Node 1 it is possible to calculate the Earliest Start Time for each activity by
adding the duration of each task

The EST for each activity is placed in the top right of each node
Node 1 is the starting point of the project and where both Activity A and Activity B begin
Activity A and Activity B are independent processes
Activity A has a duration of 2 days and its earliest start time (EST) is 0 days
Activity B has a duration of 3 days and its EST is also 0 days
Activity C and Activity D both begin at Node 2 and are dependent upon the completion of Activity
A but are independent from each other
Activity C has a duration of 3 days and its EST is 2 days
Activity D has a duration of 5 days and its EST is also 2 days
Activity E begins at Node 3
Activity E has a duration of 4 days and its EST is 3 days
Activity F begins at Node 4
Activity F has a duration of 2 days and its EST is 5 days

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Activity G begins at Node 5

Activity G has a duration of 1 day and its EST is 7 days
Activity H begins at Node 6 Your notes
Activity H has a duration of 3 days and its EST is 7 days
Node 7 is the end point of the project
Calculating Latest Finish Times

An example of a simple network diagram showing Earliest Start Times and Latest Finish Times

Working backwards from Node 7 it is now possible to calculate the Latest Finish Time for each activity
by subtracting the duration of each task
The LFT for each activity is placed in the bottom right of each node
Node 7 is the end point of the project which has a latest finish time of 10 days
Activity H has a duration of 3 days
The LFT in Node 6 is 7 days (10 days - 3 days)
Activity G has a duration of 1 day
The LFT in Node 5 is 9 days (10 days - 1 day)
Activity F has a duration of 2 days
The LFT in Node 4 is 8 days (10 days - 2 days)
Activity E has a duration of 4 days
The LFT in Node 3 is 3 days (7 days - 4 days)

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Activity D has a duration of 5 days

The LFT in Node 2 is 4 days (9 days - 5 days)
Activity C has a duration of 3 days Your notes
The LFT in Node 3 is 4 days because Activity D is the more time-critical of the two activities that
are dependent upon the completion of Activity A and so its LFT is recorded
Activity B has a duration of 3 days
The LFT in Node 1 is 0 days (3 days - 3 days)
Activity A has a duration of 2 days
The LFT in Node 1 is 0 days because Activity B is the more time-critical of the two starting
activities and so its LFT is recorded
The LFT in Node 1 is always 0
Identifying the Critical Path
The critical path highlights those activities that determine the length of the whole project
If any of these critical activities are delayed the project as a whole will be delayed
The critical path follows the nodes where the EST and LFT are equal
In the diagram below nodes 1 3 6 and 7 have equal ESTs and LFTs
Activities that determine these nodes are B E and H
These activities are marked with two short lines
The critical path is therefore BEH

An example of a simple network diagram showing the critical path BEH

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Identifying and Calculating Float Time Your notes

Float time exists where there is a difference between the Earliest Start Time (EST and the Latest Finish
Time (LFT)
Where float time is identified managers may
Transfer resources such as staff or machinery to more critical activities
Allow extra time to complete tasks to improve quality or allow for creativity

An example of a simple network diagram showing float nodes (4 and 5) and a critical node (6)
The total float refers specifically to spare time that is available so that the overall project completion is
not delayed

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The total float for a specific activity is calculated by

LFT for the activity - Duration of the activity - EST for the activity Your notes

Using the diagram above the following total float times can be calculated for Activities A to H

Activity LFT - Duration - EST = Total Float

A 4 2 0 2

B 3 3 0 0

C 8 3 2 3

D 9 5 2 2

E 7 4 3 0

F 10 2 5 3

G 10 1 7 2

H 10 3 7 0

The critical activities B E and H each have a total float of 0 days

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Worked example
The network diagram below shows the activities involved in a new promotional campaign for a small Your notes
fashion accessories business as well as the time (in weeks) it is expected that each activity will take to
complete.

Calculate
a) The earliest start times and latest finish times for each node. (4 marks)
b) The total float time for activity G. (3 marks)
Step 1 - Calculate the Earliest Start Times (EST)
Node 1 EST = 0
Node 2 EST = 0 + 3 = 3 but 0 + 4 = 4 so 4
Node 3 EST = 4 + 5 = 9
Node 4 EST = 4 + 2 = 6
Node 5 EST = 9 + 3 = 12
Node 6 EST = 6 + 4 = 10
Node 7 EST = 4 + 6 = 10

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Node 8 EST = 12 + 2 = 14 but 10 + 4 = 14 and 10 + 5 = 15 so 15

Your notes
Step 2 - Calculate the Latest Finish Times (LFT)
Node 8 = 15
Node 7 = 15 - 5 = 10
Node 6 = 15 - 4 = 11
Node 5 =15 - 2 = 13
Node 4 =11 - 4 = 7
Node 3 =13 - 3 = 10
Node 2 = 10 - 6 = 4
Node 1 = 4 - 4 = 0

Step 3 - Calculate the total float time for Activity G

Total float = LFT for the activity - Duration of the activity - EST for the activity
= 11 weeks - 4 weeks - 6 weeks
= 1 week

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Limitations of Using Critical Path Analysis

Your notes
Limitations Explanation

Very lengthy or complex projects involve a very Specialist network planning software may be
large number of activities that have numerous required
dependencies Layers of supervision may be required to
manage different groups of activities within the
project

Network analysis often relies on estimates and Significant research is required prior to the
forecasts completion of network analysis
Close and honest working relationships with
suppliers are essential

Network analysis does not guarantee the Project managers will need to be highly skilled
success of a project and will need experience of working with
complicated plans

Resources may not prove to be as flexible as Employees may require additional training in
hoped when managers identify float periods order to transfer to critical tasks
Machinery and other capital resources may
require adaptation

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