According to ChatGPT,  there are a variety of budget-related planning activities that have nothing to do with the current budget

“In summary, budgets in private sector firms are integral to strategic decision-making, resource allocation, performance evaluation and risk management. They indirectly impact various aspects of employee compensation and organizational growth by shaping the firm’s overall financial health and competitive position in the market.”

OIS has three unique planning approaches that importantly advance current best practices in:

• • Strategic decision-making
  • Resource allocation
  • Risk management

1. Objective function: It is what OIS is tasked to determine to be “best possible” for the firm. Different objective functions allow the firm to compare different approaches to firm value. They include:

• • Profit
  • Revenue: This sacrifices profit as it includes fulfilling demand that is unprofitable
  • Customer relationship: Quoting Marketing and Firm Value, Hanssens et al, Foundations and Trends in Marketing, pages 39-40. “…monetizes the expected value firm’s customer relationships as proxy for  the firm’s future financial outlook”  Also, see “Modeling Customer Lifetime Value.
  • Economic Value Added: Used to evaluate firm’s economic performance. It is based on the concept of shareholder value. It is computed by subtracting the company’s cost of capital from its net operating profits.
• Scenario analysis: It is an analysis method that helps explore different possible futures and how they might affect your goals, plans, and decisions. It can help you identify opportunities, risks, and uncertainties in a complex and dynamic environment. OIS is particularly powerful scenario planning method for two reasons:
  • It is a model whose assumptions can easily be changed to reflect the situation being evaluated including:
    • Strategic decision-making
    • Resource allocation
    • Risk management
  • The result is the best possible one
• Customer and Product Profitability: OIS’s cost structure is nested products within operations within facilities. This allows the fixed costs of this structure to be apportioned, NOT allocated. These product costs when subtracted from those products’ revenues create product profit low to high. Those same products when summed by customers create a similar ranking.