Corporate Planning Models

by Daniel Gattis, Thomas Naylor



Through direct personal contact authors have identified nearly two thousand firms in the United States, Canada, and Europe that are either using, developing, or experimenting with some form of corporate planning models. These models represent an attempt to describe the complex interrelationships among a corporation's financial, marketing, and production activities in terms of a set of mathematical and logical relationships which have been programmed into a computer. The reasons corporate management is turning to corporate planning models include: economic uncertainty; shortages of energy and basic raw materials; a leveling off of productivity; and international competition. Corporate planning models are an attractive, viable alternative to informal, ad hoc planning procedures. The uses of corporate planning models vary from company to company, depending on managerial objectives. In the survey researchers asked those firms using corporate simulation models to indicate the actual users of the model. Most of the existing corporate models (67 percent) were developed in-house without any outside assistance from consultants; 24 percent were developed in-house with outside consulting; and 8 percent were purchased from an outside vendor.

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