Feed-forward Control
Feed-forward control is one aspect of budgeting.
Definition
A feed-forward control system operates by comparing budgeted results against a forecast. Control action is triggered by differences between budgeted and forecasted results.
In contrast, a feedback system would simply compare the actual historical results with the budgeted results.
For example, the graph below shows the feedback and feed-forward system for sales:
Advantages and disadvantages of feed-forward control
Illustration - Feed-forward control
A sales manager receives monthly control reports about sales values. The budgeted sales for the year to 31 December are $600,000 in total. At the end of April the manager might receive the following feedback control report.
Alternatively, the sales manager might be presented with a feed-forward control report, as follows:
The use of a feed-forward control system means that corrective action can be taken to avoid expected adverse variances.
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Created at 6/7/2012 4:36 PM by System Account
(GMT) Greenwich Mean Time : Dublin, Edinburgh, Lisbon, London
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Last modified at 11/14/2012 2:35 PM by System Account
(GMT) Greenwich Mean Time : Dublin, Edinburgh, Lisbon, London
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