Chapter 8: We Have Got to Make Some Decisions

All decisions require managers to predict the future to some extent, either for a short time or for a long time into the future.

In my current role as Supervisor at a Hertz branch, I am constantly ‘looking into the future’ to predict fleet availability, reservation numbers, staff requirements, and fleet requests. Practically all decisions I make require me to predict the future to an extent; if I get a call to make a reservation, I need to predict whether or not I will have availability, if I have a vehicle requiring maintenance or repairs, I need to decide the best day to organise this based on the reservations on the day and staffing levels, or even if a dodgy person tries to hire a car, I need to predict whether the car will come back in one piece or if it will end up ‘stolen’ and found burnt out on a random back road (ha ha not funny – happened too many times for my liking). I think you will find that in most jobs, future prediction is a requirement and the more you practice, the better you get at it.

 

CM = S – VC If you remember nothing else about management accounting, remember this relationship.

I am glad to see this formula is the one thing to remember about management accounting, because it seems to be one of the only things that has stuck with me. I feel like this is such a simple formula to remember compared to the majority of the learning material in this very overwhelming unit. For future accounting units, I know I need to apply myself substantially more than I currently have, then hopefully there will be more than one simple formula that sticks with me.

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