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Masters of Business Administration Notes


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Degree of Urgency Method
Virtually it is not a method of evaluation of a project. Sometimes, business operations are manged on an ad-hoc basis ad not as a part of well conceived plan.


Postini Alternative

Urgency plays an important role under this method. Some projects need immediate attention while others may be postponed for some time in order to avoid disruption in the working. The project that cannot be postponed are undertaken first. For example, if there is a break down production process due to loss of any component of the machinery which require immediate replacement in order to avoid disruption in production, shall be given firs priority over all other projects pending consideration with the management without any delay on the part of the management. In this way, urgency is the sole criterion for investing t funds in the project. It may, however, be possible that investment under this method is uneconomic.

Evaluation. The method is very simple in principle as well as in practice. No technique is needed. Te project that seems urgent may be undertaken first. But the method is not a scientific method for evaluating the economic worth of t project. The main defects under this method may be enumerated as below:-

(1) Under this method, no methodical analysis is applied. The action may be correct but in most cases by coincidence. In case where projected outlay is large and far reaching g in effect, urgency cannot be a convincing influence.

What is urgent and what is not is the sole decision of the top management. Each departmental incharge persuades the top management to assign first priority for the department project. The decisions are taken not on economic considerations but on the basis of 'power of persuasion' of the individual concern.

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