How does Budgeting fit in?
Work measurement standards and budgeting are directly related. A budget forecast provides the user with an estimate of the number of units of activity which can be expected.
This forecast can be monthly, quarterly or annually. The forecast is converted to a weekly format and the appropriate units of measure are applied.
A unit of measure is an activity which has a specific time duration and it is one of the activities of the functional area for which the budget is being prepared. Examples of a unit of measure could be a box, a pallet load, the data entry of an invoice or payment of an invoice.
The number of units of measure is divided by the number of units which can be performed in an hour. The resulting number is the amount of hours needed needed to perform the scheduled amount of work. The result of the above calculation is divided by 40/hours/week to determine the number of people required to complete the function.
The budget must reflect all tasks requiring the above type of analysis as well as estimates the number of hours per period which are required for housekeeping and related functions. The sum of all budgeted activities reflects the total requirement.
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