Techniques and Models for Reviewing Resource Allocation and Planning

This report delves into the critical aspects of resource allocation and planning within business organizations. It explores various techniques and models for reviewing resource allocation, emphasizing cost-effectiveness and optimal resource utilization. The report highlights the importance of Earned Value Management (EVM) as a tool for analyzing cost and schedule variances, providing examples of how to assess whether activities are on track. Furthermore, it discusses the significance of resource planning and the use of variance reports to monitor actual resource consumption against budgeted plans. The report also covers tolerance strategies, such as contingency plans, to manage potential overruns and introduces the performance index (P.I) as a metric for evaluating the efficiency of resource allocation. Through these insights, the report aims to provide a comprehensive understanding of how businesses can enhance their resource management practices to achieve their objectives effectively.

Resource essay 1
Techniques and models for reviewing resource allocation and planning
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Resource essay 2
Cost effectiveness
Business organizations require suitable procedures for reviewing resource allocation against its
set objectives. Resource management is a critical component in organizations to ensure
objectives are achieved (Kreiling and Hird 2016, pp.15). It is for managers to identify resource
forecasting, planning and control techniques to ensure they are utilized optimally and effectively.
Establishing cost effectiveness in resource allocation is one of the important elements in
performance reporting. It involves establishing whether the resources allocated have been used
as per the required standards and targets. Earned value management (EVM) provides a suitable
analysis in which managers can utilize to establish cost effectiveness of the resources allocated.
EVM compares costs and schedules of resources allocated to a baseline to determine if the
activities are on track (Kreiling and Hird 2016, pp.18). An example of EVM analysis is when
managers are using earned value over time by making a comparison of Actual cost of work
performed (ACWP) over budgeted cost of work performed (BCWP). If ACWP is higher than
BCWP then the activities are over budgeted and vice versa. To ensure cost effectiveness
managers should ensure that the ratio of ACWP should not be higher than BCWP (Cook, Liang
and Zhu 2014, pp.15).
Resource planning
Resource planning is a suitable practice that helps in resource forecasting that the business
achieves its objectives by using non-financial and financial resources (Kreiling and Hird 2016,
pp. 26.
Resource model: Managers need to adopt a suitable model that shows how resources have been
planned. Suitable resource plan model is used in financial reporting of where it uses statements
to review resources allocated over the actual usage (Rammer and Klingebiel 2014, pp.261). The
variance report is known as budget work over performance variance report which is a cost
resources analysis technique. Table 1 shows an example of the variance report model that can be
adopted in allocation of resources.

Resource essay 3
Table 1 Budgeted work-performance variance report
Resource
name
Budgeted resources Actual resources
consumed
Variance Remarks
No. of
units
Total
value
No. of
units
Total
value
No. of
units
Total
value
Tolerance strategies
Strategies can be employed to ensure that expenditure usage does not exceed budgeted plans; a
tolerance strategy in form of contingency plan is created. A contingency plan covers a cautionary
boundary of forecast of resources. Organizations can face overruns over the resources they had
planned but the contingency plan provides an alternative for any overruns. Causes of overruns
can be from changes in scope, inflation and technology.
Expenditure over budget strategy
To ensure efficiency is achieved a performance index (PI) is calculated in order to obtain the
performance efficiency of the business in allocating its resources.
P.I = BCWP/ ACWP
Where BCWP =Budgeted cost of work performed
ACWP= Actual cost of work performed
A higher performance index (P.I) shows a good resource allocation and planning in the business,
while a lower performance index (P.I) shows a poor resource allocation strategy (Rammer and
Klingebiel 2014, pp.146). The ratio represents an analysis formula used to review allocation of
resources in organization. The allocation planning procedure review is a useful component in
ensuring organizational objectives in various activities.

Resource essay 4
Reference lists
Barrows, C., Lopez, A and Dyson, M 2015, Resource allocation and forecasting, National
renewable energy laboratory, vol. 2 (1), pp.45-78
Cook, W., Liang, L and Zhu, P 2014, DEA cross efficiency review of resources, Journal of
operational research, 235 (1), pp.12-26.
Kreiling, L and Hird., A 2016, Resource allocation forecasting using expert judgment, 23rd
EuromQMA conference, Vol.4 (2), pp. 12-23.
Rammer, C and Klingebiel, R 2014, strategy allocation models and techniques, Journal of
strategic management, 35 (2), pp.246-268