Category: Budget

According to Rose (2002), a budget deficit can be described as a situation that occurs when the government tends to spend more funds than the funds that are flowing into the economy. It can also be described as a situation where the government, private, public companies, and individuals total spending on particular goods or services actually is more than the income which they tend to generate or receive for a particular given time period (Rosen,2002). This, therefore, indicates that a government may opt to run a budget deficit purposefully for the sake of increasing the levels of economic activities as well as with an aim of increasing tax revenues.

According to the studies done by Jha (1998), on Keynesian theories running a fiscal deficit will increase the level of government debt and this will create an environment where the economic activities of a given countrys output increases and this increase in the economic activities in the economy will lead to an increase in total countrys gross domestic product The increase in the levels of economic activities normally leads to a situation where high revenues are collected inform of taxes (Brown &Jackson, 1986).

The government may opt to run a budget deficit during the periods of severe recessions or depression which is a period when the rates of unemployment are high, there are low levels of investments and the total level of production is low which greatly affects the profits that tend to be received by particular companies (Kaul & Conceicao, 2003). To deal with this situation the government may decide to borrow more funds or to run a budget deficit in order for the government to effectively deal with this period. According to studies done by Rosen (2002), the Keynesian theory of unemployment shows that a government running a deficit budget will help end or moderate recession. During the periods government may increase its spending or purchases this, in turn, leads to the creation of more markets for new businesses. When more markets are created in an economy it increases opportunities for more employment which in the end increases the total levels of income in the economy (Rosen, 2002). In addition, this tends to create more opportunities in the economy causing an increase in the level of consumer spending as an increase in the level of income has a positive effect on the levels of consumption. An increase in the level of consumption leads to an increase in demand for any given business output. This multiplier effect leads to an increase in the real gross domestic product which eventually lowers the rate of unemployment (Rosen, 2003).

Furthermore, the government may opt to use or run deficits in order for the government to increase in the size of the market which in the end leads to stimulation of the economy hence acting as an incentive to private investors who uses the opportunity to increase investment in the economy raising the levels of employment as well as increasing the levels of demand for products and services. According to Brown and Jackson (1986), if private investment in an economy increases it acts as stimulation for any economy to increase its output levels in the long run. This increase provides more funds through which the government is able to spend more on infrastructure, public health, education and other social activities which potentially increase the level of growth in the economy (Brown & Jackson, 1986).

In addition, studies by Rosen (2002), shows that when a given economy uses the flexible exchange system then the increase in the level of budget deficits causes a situation where the interest rates in an economy will tend to move upwards. When this situation occurs in the economy it causes increases in the levels of capital inflows to the economy which in turn leads to the appreciation of the nations currency hence reducing the level of net exports but an increase in the level of imports which results in the crowding out of the net foreign investment and the increase of domestic investment (Jha, 1998).

The use of budget deficit by the government has serious consequences on the economy. Firstly, it leads to inflation since due to the situation the government may opt to increase its money supply through more printing of its currency in order to curb the deficit situation. This may lead to high levels of money supply in the economy which in the end leads to the increase in the prices of goods and services as well as the devaluation of a given currency (Kaul & Conceicao, 2003).

The government deficit budget also is believed to have a major effect on a given governments economy through the loanable funds markets. This normally occurs in a situation where there is not enough money which is collected in form of tax revenues to cover all the government spending then it implies that the government looks for an alternative way which is to borrow (Rosen,2002). When the government borrows funds from outside it causes the demand for the loanable funds to increase. This creates a situation where the interests rates tend to move upwards. The increases in the interests rates cause an overcrowding effect and normally this has a negative effect on private investment spending since many investors would increase their investment in any economy if the interest rates are low (Rosen, 2002). The upward increases in the level of interest rates increases demand a situation that tends to cancel the presence of a deficit in the economy which eventually causes a long-term effect on the long-term supply side of the economy (Kaul &Conceicao, 2003).

A government deficit also is believed to have a major effect on the level of interest debt payments. Government deficit causes higher interest debt payments since by the government selling bonds in order to pay the national debt this normally leads to higher costs and higher payments costs because this situation tends to restrict the governments ability to raise any funds from other sources which can be used to cut down its outlays (Jha, 1998).

The other economic effect of a government running a deficit is that it causes a situation where the government tends to increase its borrowings for it to effectively finance its public spending. When this occurs the government will tend to rely so much on the private sector for its financing a situation that has a negative effect on the public sector. Furthermore, the use of a budget deficit means the revenue from the taxes is low but an increase in the level of government spending causes an increase in the level of aggregate demand which in the end leads to a higher level of Real Gross Domestic Product as well as inflation (Brown& Jackson, 1986). Moreover, in some situation where is high levels of fiscal deficit the government may opt to increase its taxes so as to cut down its spending or to reduce the budget deficit, this may act as a reduced incentive for investment as well as for work (Rosen,2002).

Lastly, a budget running a deficit by the government leads to increases in the rate of interest rates since the government selling more of its bonds will cause an increase in the rate of interest rates. Normally the government will opt to increase the interest rates for it to be able to attract more investors this also will have a negative effect on the other interest rates of the economy (Rosen, 2002).

References

1. Harvey S. Rosen (2002), Public finance; Published by McGraw-Hill, 6th edition: ISBN 0072374055, 9780072374056
2. C. V. Brown, P. M. Jackson (1986), Public Sector Economics; Published by McGraw-Hill, 3rd Edition: ISBN 0631145877, 9780631145875
3. Raghbendra Jha (1998), Modern public economics; Published by Taylor & Francis:ISBN 0415143152, 9780415143158
4. L. Kaul & P Conceicao (2003), The New Public Finance, Oxford University Press for the United National Development Programme.

Taking the position of supporting a balanced national budget, the policy is essential to protect future generations from huge debts. A growing federal debt can burden future generations, causing low national savings and reduced incomes (Asatryan et al., 2018). There will be high-interest payments that could make taxes rise causing a significant cut on spending. With a substantial financial burden to manage, future generations might experience the problem of responding to emerging problems and economic issues such as lack of funds. Hence, a balanced national budget must be encouraged aiming to protect the future. Although a balanced budget has the gain of protecting the future and promoting growth, this will result in losses in the economy because policymakers would be forced to reduce spending. (Dosi et al., 2019). Additionally, there might be a need to cut social security and other programs such as Medicare, which is hurting citizens. Additionally, interest rates charges from huge loaners or lenders could be saved.

Taking the position of supporting a balanced federal budget, the approach is vital to help end unhelpful programs acquired in the past. Government budgets such as capital investments would need to be balanced annually while considering future outcomes (Mikesell, 2018). A balanced federal budget ensures the government does not spend excessively and allows concentration or allocation of funds in areas that are needed most (Yushkova et al., 2016). On the contrary, there is legitimate borrowing at the federal level, for example, to support infrastructure, which helps boost future growth. Additionally, it might be noted that a balanced federal budget might lead to an undercut on social security and other government guarantees. The US government should learn to accept deficits, for instance, in the national emergency time but later ensures revenues generated are higher enough to offset the financial burden caused (Veynbender & Fadeeva, 2019). A federal budget is an important policy tool for the government to reflect on economic decisions.

References

Asatryan, Z., Castellón, C., & Stratmann, T. (2018). Balanced budget rules and fiscal outcomes: Evidence from historical constitutions. Journal of Public Economics, 167, 105-119. Web.

Dosi, C., Moretto, M., & Tamborini, R. (2019). Balanced-budget fiscal stimuli of investment and welfare value. Institute-Leibniz Institute for Economic Research at the University of Munich. Web.

Mikesell, J. L. (2018). Fiscal administration: Analysis and applications for the public sector (10th ed.). Wadsworth.

Veynbender, T., & Fadeeva, A. (2019). State Budgets and Leading Approaches for Balanced State Finance. In Sustainable Leadership for Entrepreneurs and Academics (pp. 183-189). Springer.

Yushkova, O. O., Kirina, L. S., Malis, N. I., Mandroshchenko, O. V., & Nazarova, N. A. (2018). Tax revenues and balanced budgets. European Research Studies Journal, 16, 675-685. Web.

Fiscal responsibility remains one of the most important terms when it comes to the field of public administration (Cangiano, Curristine, & Lazare, 2013, p.205). Speaking about the present situation with regard to the distribution of fiscal responsibility in such country as the United States, it is necessary to say that its capital city has a wide range of opportunities when it comes to important issues related to this sphere.

Apart from a greater degree of responsibility, leaders and representatives of different government bodies in Washington are supposed to have more decision-making power when there are urgent questions that need to be addressed as soon as possible. At the same time, it is necessary to think about the intention to place more decision-making power in state capitals and possible consequences connected with implementation of this measure with regard to state budget.

To begin with, it is common knowledge that fiscal responsibility can be regarded as an important concept because it is strongly interconnected with the range of questions concerning debt and the use of practices related to making proper buying decisions and spending money with regard to the needs of the population. Although there can be certain divergence when it comes to definitions of the discussed notion, in general, it refers to debt management and making decisions related to budget spending (Buchanan & Wagner, 2013).

If we speak about the possible effects of decreasing fiscal responsibility of Washington and giving more power to leaders in state capitals, it is necessary to take into consideration that they may be both positive and negative (Berman, 2015). As for the former, there is no doubt that people related to the development of the particular states have a deeper understanding of the problems peculiar to certain location (Sacchi & Salotti, 2014). Therefore, it can be supposed that a greater decision-making power related to state budget will help those in different states to focus more on development and implementation of the measures allowing to balance the situation (Frederickson & Rohr, 2015, p. 194).

If the power is used by them in order to improve the quality of life of citizens and mitigate the consequences of financial instability, it will have a positive influence on state budget in general. Besides, representatives of states will be provided with an opportunity to take the initiative in planning out the budget of their states. Another reason why it can have a positive effect on budget of states and country that can be singled out in this connection is related to stricter control. Although having more decision-making power involves certain independence when it comes to affirmation and implementation of newer initiatives related to the budget of state, there is another important question related to responsibility. In this case, it will be necessary to make more decisions related to accounting and the data related to budget reported by representatives of states (Kyriacou, Muinelo-Gallo, & Roca-Sagalés, 2015).

It will be necessary in order to establish a stricter control over the measures taken by leaders in states related to financial resources. In other circumstances, possible mistakes of leaders in states will result in serious problems related to the state budget. Furthermore, giving more decision-making power should involve thorough preparation as it usually means greater risks for the entire country.

In the end, budgetary effects of shifting some measure of fiscal responsibility away from Washington and providing state capitals with more decision-making power also depend upon additional measures implemented in Washington to take charge of the situation in particular states and set a limit to possible cases of malconduct.

References

Berman, D. (2015). Local government and the states: Autonomy, politics and policy. New York, NY: Routledge.

Buchanan, J. M., & Wagner, R. E. (2013). Fiscal responsibility in constitutional democracy. New York, NY: Springer Science & Business Media.

Cangiano, M. M., Curristine, M. T. R., & Lazare, M. M. (2013). Public financial management and its emerging architecture. Washington, DC: International Monetary Fund.

Frederickson, H. G., & Rohr, J. A. (2015). Ethics and public administration. New York, NY: Routledge.

Kyriacou, A. P., Muinelo-Gallo, L., & Roca-Sagalés, O. (2015). Fiscal decentralization and regional disparities: The importance of good governance. Papers in Regional Science, 94(1), 89-107.

Sacchi, A., & Salotti, S. (2014). How regional inequality affects fiscal decentralisation: Accounting for the autonomy of subcentral governments. Environment and Planning: Government and Policy, 32(1), 144-162.

A significant portion of the federal budget is focused on defense programs, domestic security, and maintaining foreign relationships. Although the federal budget accounts for several vital aspects like healthcare, education, and social security, where any changes would have an instant effect, the same could not be said about reducing some elements of the defense part. This essay will justify the budget choices I made in the defense category and address possible counterarguments.

The changes I have decided to make to the federal budget include allowing veterans to see doctors outside of the VA, limiting eligibility for the veterans benefits, and reducing foreign aid and international program spending. Although allowing veterans to see any doctor outside of the VA would potentially increase the debt by 4% by 2050, this measure involves both social security and healthcare aspects for one category of the population. Moreover, the following measurements I have chosen would equal the effect, so despite a possible future increase in the debt, it is going to be neutralized by the reduction of other points of the defense budget program.

Although the 2018 law has previously covered the issue of delays in the VA, the law did not fully address the communitys needs as it put several restrictions on the veterans. Currently, the veterans can only apply for the program in the VA medical facility and cannot schedule an appointment in the nearest 30 days, or if they live more than 40 miles away from the nearest VA medical facility. Aside from the financial effect, the change would significantly improve the healthcare situation for the veterans by reducing the delays in providing health care services.

The next decision also implies the social aspect of life as it touches on the subject of veterans life and social benefits. The measurement implements a revision of the current system of benefits and compensations for the veterans by introducing new limits for compensation on certain health conditions and disabilities that are not combat-related. The limitation of eligibility and scope of veterans benefits could possibly decrease the level of debt by 3% by 2050, which is a significant amount for measurements that implies revision and restructuring of a currently existing system. Although the action could be misinterpreted as a reduction of financial aid for the veterans, the correction of current qualifications for financial aid is needed to ensure effective use of the budget. The action would not wholly take away the compensations but limit them to make sure that a particular individual would not get multiple payments from several organizations for the same reason.

The final decision is to reduce the foreign aid and International program spending. In my opinion, the ongoing unsolved problems that include providing care for the veterans should be considered a priority for the government. The federal government spends around $55 billion annually on international affairs, diplomatic programs, and economic and humanitarian aid. Although maintaining friendly international relationships is essential, there should be a limit on spending on this cause as the same amount of budget could cover other valuable issues. As long as domestic problems could be solved or improved with parts of the federal funding like healthcare, education, or veterans care, they should be prioritized over international affairs spending.

In conclusion, this essay explained and justified the budget choices I made in the defense category and addressed some possible counterarguments. The assignment made me understand the importance of the budget process and appreciate the effort the parties put into debates regarding the budget. I think that the budget process should be streamlined so that anyone can educate themselves on the topic and give the people a chance to react to the changes promptly. If the budgeting process was a group project, I think that the first thing on the way to compromise would be setting priorities by the group and then acting based on the conducted tier of importance.

Introduction

LRH Products is preparing to attend a major trade show event in Sacramento, CA. In order to attend the trade show various activities should be incorporated which is considered as individual tasks of a project. The activities include stocking up the collaterals, staffing the sales people, transportation etc. The project starts before ten weeks and so all the activities should be planned. In addition, adequate budget allocation is required. The report is about various ways of determining the budget for the individual tasks and the pros and cons of each tool.

Task budgets for a project  a general overview

There are mainly two methods for determining the individual task budget of a project; mainly top down method and bottom up method. The most traditional way is bottom up method Top down approach came into existence during 1990s. Both the top down and bottom up approach have their own advantages and disadvantages.

Top down method

In this method the total project budget or higher level task is reviewed in the first step. In the second step, the scope of individual task is reviewed based upon the importance of individual task and the total budget is allocated to individual task. When the company offers a certain amount of money at the beginning of a project then this type of method is used.

Advantages and disadvantages

Thus as budget is allocated based on the scope of the individual tasks, it has an advantage of controling the cost and reducing excessive spending. There is also a sense of commitment, ownership and support from the part of the top-level managers as they are responsible for preparing it. As the budget allocation is based on the initial sum of money allocated, it may be considered as a drawback of this method as the total project budget may not be realistic. As the top-level managers prepare the project budget, there may be a feeling among the low-level managers that they are not considered in the project budget, which may de-motivate them. In addition, there may be conflicting relations between the functional departments. The other drawback is that the top down approach will be a failure if the top-level managers are not experienced and knowledgeable.

Bottom up or cost aggregation method

In this approach, the individual cost for labor, materials, and other resources is determined in the first step. In the next step, all individual task cost is totalled to establish the total cost of the entire project. Therefore, a detailed work breakdown structure with different tasks, sub tasks, work package is required for bottom up budgeting. Here the individual concerned with the project is consulted to estimate the cost of each task. (Finance Info, 2009).

Advantages and disadvantages

Sufficient funds for each task are one main advantage of this method. In case of small projects, the cost estimation would be more accurate. This also may be the drawback as the individual concerned may be overstating the actual requirements thus leading to surplus spending. The individual managers may tend to ask more funding for the project than the actual requirements. Another limitation is that drawing up the complete list of task may be difficult. Sometimes we may ignore some steps, which may cause problems to the estimation of the budget. (Venkataraman, & Pinto, 2008, p. 86).

Coming back to the case, as the company has allocated certain amount for the trade show, bottom up approach is suitable for the allocation as it helps to fill the budget with individual tasks if there is no other constraint.

Project managers role in determining the task budget

The success of the project depends upon the experience and judgment of the project manager. The project manager plays different roles during a project. One of the important tasks of a project manager is to prepare the project budget. As the project manager is responsible for determining all the tasks of a project and its scope, it would be easy for him to determine the cost. If the top down approach is used the project manager has to determine the scope of individual tasks and then allocate the whole budget to individual tasks. If bottom up approach is used, the project manager should estimate the individual task budget and prepare the overall budget. (Bushman, 2009). In addition, it is the responsibility of the project manager to analyze whether the cost of the project is running over or below the project budget. So if the cost is exceeding the limit, the project manager should take necessary steps to increase the performance while reducing the excessive spending.

Conclusion

A number of issues should be considered while preparing the project budget. Estimation of the individual task cost by the individuals concerned will be the most suitable way of estimating the cost of the project. This helps in estimating a more accurate cost. Efficient control should be exercised in order to control the excess spending of the budget. So while preparing the project budget, each work package in the work breakdown structure should be allocated adequate budget.

Reference

Bushman, Melissa. (2009). Determining Task Budgets for a Project. AC: Associated Content: Information From The Source. Web.

Finance Info: A comparison of Top- Down to Bottom-Up Budgeting. (2009). Web.

Business KnowledgeSource.com: Knowledge to Help You Build Your Business. Web.

Venkataraman, Ray R., & Pinto, Jeffrey K. (2008). Cost and value management. 86. John Wiley and Sons.

Balanced Government Budget

A balanced government budget is a budget, in which expenditures are on the same level as revenues; however, a budget can also be considered balanced if the expenditures are smaller compared to revenues. In this environment, there is generally no deficit, although there could be a surplus that does not harm the economy. Many economists agreed that a balanced budget had the potential to decrease interest rates and, thus, subsequently increase investments and savings for the economy that will be able to grow at a rapid pace over a prolonged period.

If to mention the views of the supporters of the argument pro the balanced budget, the research by Stone (2016) stated that the balanced-budget rules increase the growth of the economy using increasing the productivity of debt as well as withstand a variety of robustness checks, including alternative lags [&] and the influence of outliers (p. 79). Therefore, the proponents of a balanced budget suggest that it can be an effective tool for preventing government spending from expanding beyond the limits of an entity. In turn, this contributes to the avoidance of deficits (an economic environment where revenues are smaller than expenses) that hurt the economy, as mentioned by Mankiw (2014). In the case when the government establishes a formalized balanced budget, there are restrictions on spending that can be authorized by lawmakers. Depending on the economic circumstances, such a development can be either positive or negative. On one end of the spectrum, a balanced budget can reduce the governments wasteful spending, while on another end it can limit useful spending. Despite the obvious benefits of the balanced government budget, there are some limitations that opponents usually point out to advocate against the usage of balanced budget rules in economies.

However, on the other side of the debate, balanced budgets have been heavily criticized as not desirable for the economy (especially every year). If an economy is steadily pursuing a balanced budget without taking into account the current circumstances, the economic downturns could become very complicated, as argued by critics. If a balanced budget were established during a recession and deficit, the cuts in the economy would make the environment even worse. Also, proponents of Keynesian economics argued that the best way of developing balanced budgets had to be associated with business cycles.

The argument against the constant usage of balanced budgets seems to hold more ground as opposed to the views of the balanced budget supporters that usually disregard the economic environment in which the budget is being established. For example, during recessions, a balanced budget cannot fix the problem, thus, instead, governments should run deficits (increasing spending and decreasing taxes) that will potentially mitigate the adverse effects of a recession-stricken economy. As soon as the economy recovers and moves towards the cycle of growth, the government should shift its approach and run a surplus (decreasing spending and increasing taxes). As a result, the economy will balance itself in periods of recession and surplus cycles without risking establishing a balanced budget that disregards the economic environment of a country. Overall, the topic of balanced budgets is controversial; however, the suggestion to establish it in cycles, depending on the economic situation, can be considered more useful since it takes into account the immediate and the long-term implications.

Active Monetary and Fiscal Policies

When governments need to influence the macroeconomic outcomes, monetary and fiscal policies have been primary sources of their action. Underactive monetary policies, a central bank of the country implements monetary measures to respond to the shifting economic conditions. The bank has to choose acting or not acting based on the economys assessment. Active fiscal policies are associated with the countrys government (the president, the Congress, etc.) making a deliberate decision to change the economys course by altering the spending or taxation. According to the findings of de Jesus and Correia (2016), fiscal policies can be effective macroeconomic stabilization tools.

When it comes to the opinions of monetary policy supporters, there is a prevailing view that central banks can act very quickly when using monetary policy instruments, and often even the signal of their intentions can bring some results. Another view that supporters hold is associated with the fact that central banks do not depend on politics, which means that monetary actions can be undertaken in the period of elections without the risk of any negative political repercussions. Furthermore, monetary policies such as lowering interest rates and increasing the supply of money lead to currency weakening (Kliem, Kriwoluzky, & Sarferaz, 2015), which, in turn, contributes to the increase in exports. Among the positive contributions of fiscal policies, supporters stated that governments could direct their spending to specific areas since fiscal policies are not general. Furthermore, the effects of fiscal policies can be seen much sooner compared to the consequences of monetary tools implementation.

As the topic of active fiscal and monetary policies has been heavily debated, there is another point of view regarding their implementation that goes against the positive characteristics described previously. Opponents of monetary policy implementation have argued that there is a risk of hyperinflation; for instance, if the Central Bank sets interest rates that are too low, there is a possibility of over-borrowing at cheap rates. Furthermore, monetary policies have been criticized for the lags in implementation: if monetary policy is implemented too quickly, the macro effects will usually appear after some time. Regarding the criticism of fiscal policies, there is a risk of budget deficits and the possible political motivation that can have adverse effects on the economy overall.

Given both perspectives on the topic of active monetary and fiscal policies, the view in support of these macroeconomic enhancement tools holds more ground. The benefits of monetary and fiscal policies are vast and thus can have an impact on countries economies. When it comes to monetary policies, they are effective in promoting political freedom of banks, their transparency, and predictability. Since the economic development of countries tends to be unpredictable (which hinders the majority of processes in the country), if there is an option to make it smoother and more predictable, the government should always choose to support its implementation.

References

de Jesus, C., & Correia, F. (2016). Active fiscal policy and macroeconomic stability. Journal of Economic Studies, 43(5), 749-762.

Kliem, M., Kriwoluzky, A., & Sarferaz, S. (2015). Monetary-fiscal policy interaction and fiscal inflation: A tale of three countries. European Economic Review, 88, 158-184.

Mankiw, G. (2014). Principles of macroeconomics (7th ed.). Mason, OH: Cengage Learning.

Stone, J. (2016). Do balanced-budget rules increase growth? Bulletin of Economic Research, 68(1), 79-89.

Introduction

Budgeting is a crucial practice that helps to achieve goals through the efficient use of money. Planning budgets can be beneficial both on corporate and family levels. Family budgeting is crucial for improving financial well-being. First, budgeting helps to distribute family income to achieve satisfactory living. Second, budgeting helps to control unplanned events by reducing costs when needed. Finally, budgeting is crucial for improving savings potential.

Microsoft Excel is of the basic tools that can be used for budgeting. It includes all the needed functions and its interface is intuitive. At the same time, there are many free online lessons that can help anyone master the basics needed to create a family budget. This paper provides a realistic example of a family budget that was created using Microsoft Excel.

Discussion

In order to make a realistic example of a family budget, it was necessary to select relevant demographic data of a family. I imagined the following situation: I, Hnd Qasim, am married to Mohammed Qasim. We have two children: a seven-year-old daughter, Jumana, and a three-year-old son, Ali. We live in a three-bedroom house in the suburbs with good schools. I drive a Ford Explorer van, and my husband drives a Toyota Corolla.

The suggested format for the budget has three types of tabs: demographic data, months, and summary. Different kinds of tabs have varying formatting, while months tabs have similar formats. The similarity in formats was achieved by uniting all the months in one group and editing the group. All the tabs are cross-referenced, so the changes in one tab will modify all the others. For instance, monthly budget tabs reference the income in the demographic tab. This is called 3d referencing, and it is crucial for making the document as handy as possible. 3D referencing also reduces the number of needed calculations and decreases the probability of error.

The demographics tabs include all the basic information about family and associated expenses. The information included is names of all family members, marital status, incomes, housing choice and costs, car choices and cost. All the data is visually divided into four categories: basic demographics, income, home, cars. The information was subdivided to make the tab more esthetically pleasing and help the viewer understand the information. The page also includes headers and footers in case a printed copy is needed. This page may also include a family photo.

Month tabs include budget breakdown using 25 categories. The purpose of budget breakdown is to compare how the budgeted amount differs from the actual spending. The tab uses conditional formatting to mark positive difference green and negative difference red. It helps the viewer to understand what categories should be paid attention to. Significant deviations from the budgeted amounts are explained using comments. For instance, my March tab includes a comment that my car blew a tire and I had to replace it at the cost of $540. Some information is put in manually, while others, such as income, escrow, income tax, and house expense, are filled in using formulas and referencing.

Summary tabs consist of two pages. The first page is filled with sums of all the numbers, including budgeting amounts, expenses, and income, using 3d referencing. The expenses that were different from the budgeted amounts are highlighted using conditional formatting. The purpose of the summary page is to see how the local differences between budgeted and actual spending affect the big picture. The second page includes summary information about expenses with a decreased number of categories and a pie chart of expenses.

Even though it was initially suggested to distribute the expenses into 7 categories, I found it impossible to include savings and income tax into any of them. It is also worth mentioning that even though the family pays off many loans, such as mortgage and car loans, these expenses were included in other correlating categories, such as housing and car. The loans categories include only credit card payments. According to the analysis, the family spends most of the money on income tax and miscellaneous expenses. Before the activity, I believed that the majority of money is spent on food. However, my opinion was biased as judged on the emotional level. I spend money on regular payments, entertainment and miscellaneous things without noticing it, which may create a hole in the budget or decrease savings.

Excel has a user-friendly interface that can be understood by almost anyone. However, I encountered major complications with conditional formatting. While it was easy to make rules for the difference column on the months pages, the summary page was challenging to format. I had to create 50 rules manually, as every cell referenced a different corresponding cell. I believe that there should be a more convenient method for approaching the issue; however, I failed to find it.

Conclusion

Budgeting is extremely important for the conscious distribution of family income. Microsoft Excel is an optimal tool for creating a family budget as it includes all the needed functions. One does not need to have special skills to create a budget. Even though it may be time-consuming to create a template for a family budget, it does not require much time to update the file when expenses occur.

No one is likely to deny that traveling is rather popular nowadays. Any demand is acknowledged to create its supply, so there are many travel agencies, which results in a fierce competition in the segment. Therefore, being competitive happens to be a goal to attain. Although there are a plethora of factors that might have their impact on a general success of a travel agency, the finance issue appears to be crucial, so it is reasonable to consider the matter of a budget and its elements with regards to a travel agency.

Being a calendar plan of all receipts and expenditures, the budget is expected to enable the administration of a travel agency to make decisions, outline plans, and exercise control in the course of management. Hence, the budget tends to influence the demand for resources which are necessary to get predictable receipts (Guess, 2015). Two types of budgets are distinguished: operational and financial (Finkler, Smith, Calabrese, & Purtell, 2013). In a travel agency, the base for the operational budget might be provided by the following elements: sales budget, remuneration budgets (separate for its constants and permanent parts), a rent budget, ongoing overhead costs, a plan of special occasions (including marketing and investment plans), depreciation reserves, and a tax budget. The financial budget of a travel agency should contain the prognosis on the review of financial results, the prognosis on the review of movement of funds, and the prognosis on the balance sheet. The latter should take into account the seasonality of sales which is a peculiarity of the segment. A budget arranged top-down is acknowledged to involve the collection of the budget information from a responsible employee to the supervisor and then to the management (Keating, 2016). However, for a travel agency, it might be more reasonable to introduce a budget arranged down-top because it is asserted to require a clear insight into major peculiarities from the management as well as the administrations ability to give a realistic prognosis for the period under consideration.

A budget structure proves to be necessary to form a hierarchy of budget elements (Schwartz, Westerbeek, Dongfeng, Emery, & Turner, 2016). First, the responsibilities are divided between structural departments of a travel agency. Second, the formation of joint receipts and expenditures creates the hierarchy comfortable for consideration of different calculations. Third, a fiscal budget is formed, which means the structure includes items related to the movement of funds in a travel agency.

The seasonality of the segment entrains the necessity to touch upon long-term budgets and short-term budgets. The administration of a travel agency should be implemented through a month-long budget, as it supplies the best criteria for current decisions. Analyzing the month-long budget entrains corrections to both the perspective and a long-term budget. The latter is supposed to provide major landmarks for the main indexes, whereas it is aimed to determine the general financial strategy (Gupta & Gupta, 2017).

In conclusion, it is necessary to restate the main elements of the budget of a travel agency: receipts, expenditures, a financial result (deficiency or surplus), and principles of budget system construction. In the course of budget system development, it happens to be important to bear in mind the seasonality of the segment. Besides, since financial planning is tightly connected and guided by marketing and other plans, and is subject to the strategy, no financial prognosis is practically valuable until marketing and strategic solutions are elaborated.

References

Finkler, S. A., Smith, D. L., Calabrese, T. D., & Purtell R. M. (2013). Financial management for public, heath and not-for-profit organisations. Boston, MA: Pearson.

Guess, G. M. (2015). Government budget: A practical guidebook. Albany, NY: SUNY Press.

Gupta, S., & Gupta, P. (2017). Evaluating maintenance budget for an AC plant under its contextual conditions. Journal of Faculties Management, 15(1), 1-18.

Keating, S. B. (2016). Financial support and budget planning for curriculum development or revision. Evaluation in Nursing, 8, 169-184.

Schwartz, E. C., Westerbeek, H., Dongfeng, L., Emery, P., & Turner, P. (2016). Managing sport facilities and major events. New York, NY: Routledge.

Introduction of the Product

On the modern stage of development, society has already created a number of different approaches that can increase the flexibility and comfort of a human being. Nevertheless, there are different risks and situations when a person needs instant help in difficult situations. One of the most effective methods of reaching the maximum level of security, not to feel restricted, and reduce spending is the usage of electronic or robotic companions.

It is explained by the constant and stable work, the elimination of personal interests, diseases, and weekends of the employee (Royakkers and Est 81). It is worth highlighting that the robotic companion is the perfect option to reach the goal, namely the security and facilitation of life, by saving a balance between costs, quality, and progress. The development of the technologies today will consequently lead to a number of possibilities tomorrow. Innovations are not only about technologies; it is more about combining experience and adjusting them not only to the current market needs but to the needs of the future customer as well. Nowadays, it is evident that electronic or robotic companions will become an essential part of future life.

Analysis of the Industry (Porter’s Five Forces)

In order to get better involved in the issue, the industry should be analyzed by Porter’s five forces, namely competitive rivalry, a threat of new entry, buyer power, supplier power, and a threat of substitution.

The modern system of human support functions in relation to human needs. In case an individual needs something or wants to get help, he can consult certain institutes. However, it is not always possible, for example when a person is attacked by a criminal, and there is no time to call the police or when an individual experiences a heart attack or allergic reaction. In such a situation, the system of support that was developed by society, despite its competence, cannot provide a human being with needed help. Thus, the robotic companions are essential, and they are undoubtedly more effective in terms of instant help and reaction. So, the market is not very competitive as the robotic companions provide a number of advantages.

It is worth pointing out that this segment will turn to popular and competitive when the majority of companies realize that it can be profitable. Thus, the threat of new entry is high. The fundamental factor that will determine the success of the company is the implementation of multi-functional and effective innovation. One of the examples of the company that influenced the technological market is considered to be Apple. It changed the concept of smartphones and opened a new segment of the market. At the very beginning, Apple did not have rivals, however, with the development of technologies and understanding of other companies the true value of innovations Apple faced a lot of competitors that put the popularity of the product under threat (Wit and Meyer 65).

The robotic companions will enjoy tremendous popularity and no matter the price of the product. The target group of customers will be found. The price for innovations and specific goods is high at the beginning of the production. However, it should be stressed that in the future, the price will decrease significantly. The original price will be high as it should cover the expenses for the research and production of the goods. The high price will also serve for the popularization of the product. Robotic companions will be purchased by wealthy people, and they will establish a new trend.

As for the supplier power, it should be noted that they would not influence the price of the product as a number of companies invest in development and innovations and will be able to produce necessary details and parts for the robotic companions.

In terms of the threat of substitution, it is essential to stress that the risk of substitution is low. Although there are some risks that the product will not be popular or will be substituted, it should be noted that innovations always attract and robotic companies are likely to experience success on the market. Robotic companions will not be substituted until the time the companies invent an even more innovative product that will suit the needs of the customers better than robots. From the stated above, the conclusion can be drawn, the threat of new entry is high; the threat of substitution is low, the power of buyers is medium, the power of suppliers is medium, and competition is low.

Blue Ocean Strategy

1. Eliminate the risks of the absence of help in difficult situations;
2. Raise the security level and facilitate daily life;
3. Reduce the level of criminal activity and death because of lack of help;
4. Create a new movement in the technological industry, build social relations, and transit to the new stage of development.

Implementation Plan and Budget

First of all, the technologies should serve the needs of people with disabilities as they are the group that needs such electronic companions most of all. This way, the system will be implemented in the system of medicine, and it will provide a necessary level of promotion and help people who need it. Moreover, the company can get the support of governmental structures. In addition, the product should be positioned as the one that is vital for every human being. To increase the revenues and budget, it is essential to create a system where people will be able to invest money and obtain the product in the future with a discount.

The production of robotic companions demands a lot of resources and money. The pre-order will positively affect the production as it will provide manufacturers with enough money. However, the customers will benefit as well as they will get the product cheaper. This experience was used by Tesla Motors when they were selling solar panels and charger stations (Daim, Pizarro, and Talla 78).

Market Data

In order to choose the suitable direction of the company’s development, it is essential to examine and evaluate the market according to market data. It will consequently lead to the reduction of the risks and will increase the popularity of the product. The combination of different kinds of statistic data will be beneficial for the development of the company’s strategies and will contribute to better profits.

IPR strategy

In the sphere of production where innovations receive the priority and the primary concern, the fundamental tool for fostering the development and implementation of new technologies by a certain company is the protection of innovative ideas. The primary strategy is to develop the design of the product that will be recognizable.

Design of the MVO

While developing the innovation, a particular focus was put on its visual concept. It was considered critical that the proposed product has an attractive design. Practice shows that a large number of customers are determined by visual perception while comparing the offers of a particular product line. From this perspective, creative and friendly design is likely to ensure a competitive advantage. The draft visual concept of the proposed product is represented below.

Furthermore, a website was also designed in order to support the developed concept. It is assumed that product promotion will be more productive in case the targeted audience is informed through various media channels. Hence, the web-site includes the essential mandatories and gets the audience informed about the core values and the strategic attributes of the brand.

The site was created with the help of the Wix platform that offers unlimited opportunities in terms of concept construction. The site has a bright and playful design and a convenient interface concept. It is assumed that this platform will not only assist in raising the public awareness of the product but will also simplify the relevant connection for potential investors. Moreover, the Wix platform is a free resource so that this type of design implementation does not require any extra expenses.

The key benefit of this prototype resides in the fact that it can be accessed through the relevant Facebook page. Otherwise stated, people can reach it through the re-posted links or through the direct web link.

Implementation Plan

A consistent implementation plan determines the general efficacy of the project’s realization. Thus, it is important to ensure that the targeted timeline sets reasonable limits for accomplishing every stage. The timeline represented below shows the key milestones of the project implementation within the next months.

The timeline represented above shows that there are seven key stages that constitute the project’s implementation. First and foremost, it is the idea generation and screening that should be essentially carried out at the very beginning. At this stage, it is important to generate the general concept of the product and try to target its place in the relevant market. Thus, preliminary research has been carried out in order to examine similar offers and evaluate the demand for this kind of innovation. A thorough study of these aspects has shown that the relevant niche is not fully filled yet, and the demand for high-tech innovations keeps growing. It was likewise identified that the proposed product should essentially possess some peculiar characteristics apart from merely entertaining options. As a result, it was decided that the innovative product might carry out the assistive function. Otherwise stated, it can be positioned as a multi-functional electronic companion.

Later on, at the development stage, the concept was elaborated, and the product acquired some new parameters. The business analysis that is being currently carried out is aimed at evaluating the rivals’ offers and targeting the audience. At this point, it is assumed that the targeted audience will comprise at least four social clusters: children, high-tech lovers, wealthy class, and those who need some assistance (patients, physically challenged people, elderly people, etc.). It is also proposed that the product is outsourced with the help of a recognizable brand in order to increase the public’s interest and gain its loyalty.

As soon as all the stages described above are completed, it will be necessary to carry out the relevant beta testing and perform a powerful marketing campaign. The former is expected to determine the core flaws in the pilot version of the product and eliminate them. In addition, the sample of customers will be involved to comment on the product’s disadvantage – the received feedback will be helpful to perform the essential improvements.

The marketing campaign should get the targeted audience informed of the product’s launch and create a feeling of anticipation. As far as the beta testing is completed, the final technical implementation will be performed with due consideration of the collected customers’ reviews.

It is considered that the launch of the product is not only accompanied by a powerful advertising campaign, but the date of its release also coincides with some popular holiday. In this case, there are better chances to receive high revenues. The launch stage also implies fixing the reasonable price. The preliminary cost can be introduced at the beta testing stage, though it might turn out that the initial cost is irrelevant to the market realities and needs to be fixed. In any case, it is essential to ensure that the set price is both rational and competitive.

The final implementation stage includes evaluating the outcomes and assessing the revenues. The key target of this stage resides in identifying the factors that impede the product’s promotion. It is possible that the project’s evolution will show that some changes need to be implemented. The duration of this date is targeted at a one-year period.

Budget Plan

As long as the product is currently at the development stage, it is considered most rational to begin planning the budget in terms of expenses. The table below represents the budget plan for the next 12 months that contains the presumable expenditure items.

Therefore, as might be seen in the table above, the largest expenditure is the production expenses. It should be noted that such a phenomenon is typical of high-tech product development. Another critical expenditure is personnel expenses. From this perspective, it is highly problematic to define the expected sum of money required for the outsourcing contract. The size of expenses, in this case, depends largely on the company that will agree to collaborate – the more recognized brand it will be, the more money will have to be spent on the contract.

Meanwhile, it is essential to note that the presented budget plan reflects general prospects. Otherwise stated, it should be realized that the indicated expenses will be dispensed throughout the twelve-month period. Thus, the major part of expenses will refer to the first cycle of product development whereas its implementation will require less money. It should, likewise, be noted that the current business plan might fail to include some expenditures that are likely to arise in the course of the project’s realization. As a consequence, it is recommended that the targeted amount of expenses is rounded off to half a million dollars.

While the required expenditures are relatively predictable, it is hardly problematic to forecast the expected revenue. Moreover, the size of the revenues depends largely on the cost set for the product. The table above represents a brief overview of the expected revenues for four cycles (presuming that each of the cycles stands for three months).

The first cycle is not expected to bring any revenues, as, during this period, the product will be developed and tested. The highest revenue is expected in the second cycle that coincides with the product’s release. Practice shows that recently appeared product meets the highest demand possible. Thus, it is necessary to take into account the fact that the powerful advertising campaign will attract more customers than there will naturally be in the future. In other words, the highest sales are expected at the beginning of the product’s launch when it will be perceived as a novelty.

However, a few months later, the interest in the product might naturally fall. First and foremost, some of the customers are apt to be dissatisfied with the product’s quality. Secondly, the product will lose its innovative connotations. At this point, it is considered reasonable to cut down the cost of the product in order to maintain the revenue’s level. In the last cycle, the sales are expected to fall insignificantly as the cost-reducing approach might not be employed at this stage.

Works Cited

Daim, Tugrul, Melinda Pizarro, and Rajasree Talla. Planning and Roadmapping Technological Innovations: Cases and Tools. New York: Springer, 2014. Print.

Royakkers, Lamber, and Rinie Est. Just Ordinary Robots: Automation from Love to War. Boca Raton: CRC, Taylor & Francis Group, 2015. Print.

Wit, Bob, and Ron Meyer. Strategy: Process, Content, Context: An International Perspective. Hampshire: Cengage Learning, 2010. Print.

Executive Summary

Widows Server 2008 R2 offers extra access options. They include options such as dial-up remote access as well as modern DirectAccess technology. The new technology will provide Global Merchandise Corporation with a more advanced platform that has bigger band width; user and administration ease of use, greater compatibility as well as an advanced security option.

The report was prepared in order to establish the costs associated with deploying Global Merchandise Corporation computer system with a newer advanced Widows Server 2008 R2 operating system as well as adoption of widows 7 desktop. The move was aimed at upgrading the Global Merchandise security. The project is anticipated o cost approximately $ 197,500.

Global Merchandise Corporation will use about 110000 to purchase 20 units of Widows Server 2008 R2 at a cost of $ 5500 each. In addition, about $ 20,000 will be used to pay for the IT professionals who will foresee the changes needed. Moreover, the implementation of the new changes will entail the employees using new methods as well as procedures that they are not conversant with.

Subsequently, Global Merchandise Corporation will require training its workforce on using their new system in order for them to be in a position to use the new functions that are incorporated in widows 7 desktop. The training of the Global Merchandise Corporation employees is estimated to cost approximately 67500.

Despite the high costs that will be involved in this transformation, Merchandise Corporation is expected to enjoy the long term benefits that will accompany the change such improved protection of organizations information and intellectual property, reduced IT labor costs, reduced bandwidth costs as well as smoother connectivity.

Introduction

The 21^st century has been noted by great advancement in technology and especially an enormous development in Information Technology (). Microsoft Corporation has not been left behind as it has introduced many great products into the market.

Widow Server 2008 R2 and Widow 7 desktop are some of its latest inventions that have tremendously improved IT. Widows Servers 2008 R2 as well as Widows 7 desktops have greatly enhanced performance, connectivity and system security.

Servers

The latest widow server 2008 R2 is more advanced than the Microsoft widow 2000 and Widow Server 2003. In Microsoft corporation a newer widow edition builds on the strength of the later version and incorporates new innovations in technology to offer an environment that is more reliable, productive and more connected. It offers newer and more efficient file print as well as improved web and other applications.

Widow 2008 server has a newer feature referred as DirectAccess that allows greater connectivity than the virtual Private Network that is associated with widow 2000 and 2003. DirectAccess is capable to set up associations to the system network every time it has internet connectivity even if they are located at port controlled firewall or at the back the web proxy. In addition, the presence of DirectAccess feature in widow server 2008 makes the administrators tasks easier.

The availability of the DirectAccess feature makes the administrator to have more control over the computers that are connected to the organization’s network. Thus, the administrator can straightforwardly bring up to date Group Policy or software on the systems each time it connects to the internet. DirectAccess enables him/her to update the system software even to the systems that are not logged on.

Widow Server has more advanced security features than widow Server 2000 and 2003. DirectAccess present in Widow Server 2008 uses IPv6 which supports multifactor authentication that is more effective than IPSec present in Widow Server 2000 and 2003. IPSec authentication is only restricted to the user and the computers. Despite DirectAccess using IPv6, client systems are able to connect to the widow 2008 server on the organization network via the IPv4 Internet.

In addition, DirectAccess separates internet traffics and intranet traffics to enhance the performance and security of the network. The separation makes it possible to restrict internet communications passing through the internal network. Moreover, Widow Sever 2008 R2 permit the administrator to manage which applications relays with the internet and those interior subnets computers they can hook up to.

This not capability is not possible with Widow Server 2000 and 2003. DirectAccess have two IPSec tunnels that are designed to enhance its security. One of the IPSec is an Encapsulating Security Payload. It employs a computer account and a computer certificate authentication to get admission to DNS servers as well as get access of the domain controllers. It is also used to get access to management servers like Network Access Protection and software update.

This IPsec tunnel helps to manage the system even when the workstations are not logged on. The other IPSec tunnel employs a computer certificate and user credential to obtain authentication using Kerberos. This helps the users to have the access of the company’s applications and resources from the network. Moreover Widow Server 2008 R2 provides end-to-end IPSec encryption that is very secure (Shinder, 2010).

Linux is another very effective Widow Server. That is the reason why the management had opted to include it as one of its preferred operating system. Nevertheless, the company should consider to upgrade their servers from Widow 2000 , 2003 and Linux server in order to enjoy the DirectAccess feature that accompany Widow Server 2008 R2. Thus, Widow Server 2008 R2 is known to provide greater connectivity, performance as well as protection over Widow Server 2000, 2003 and the Linux Server.

In addition, the company should consider doing away with the Linux servers and replace them with Widow Server 2008 R2 in order to increase compatibility of the network devices as the entire network will now be comprised of devices that share similar technology. This will greatly help to enhance security, performance and connectivity of the network (Williamson, 2009).

Widow 7 Desktop

Widow 2000 and widow XP are very popular desktops that have been highly embraced by many corporate as well as personal computer users. The Global Merchandise Corporation is not an exceptional; it has over 90% of its desktop computers running on widow 2000 and widow XP. The management should consider upgrading its XP and widow 2000 desktop computers with Widow 7.

The change will help the company to enhance its performance and also reinforce the security of its network. Global Merchandise Corporation should immediately consider replacing those desktops that runs with widow 2000 since they are outdated and are no longer supported by Microsoft Corporation This is because Microsoft Corporation terminated the support of widow 2000 in the year 2010.

This means that those computers that operate with widow 2000 do no longer receive security alerts as well as other updates that Microsoft Corporation provides occasionally to enhance the security as well as the performance of its systems (North, 2010). Moreover, Global Merchandise Corporation should consider replacing widow XP.

The reason why it should consider replacing widow XP is because Microsoft Corporation will stop supporting widow XP in the year 2014. Therefore after the year 2014, the corporation will get into a big problem when it gets into a situation where 90% of its desktops will be running on software that are not supported by Microsoft Corporation if it does not update them.

This will make the corporation to greatly compromise the performance and security of its network.In addition, Global Merchandise Corporation should consider upgrading its system to newer and more efficient Widows 7 software desktop. Widows 7 has a more appealing and interactive interface with an improved task bar that enables users to arrange objects on the task bar according to one’s accord with added functionalities.

This helps users to avoid having cluttered desktops. In addition, Widows 7 desktop has improved networking features. Thus, Widow 7 desktop has made networking to become livelier as well as friendlier. Now, the administrator is able to set a network quite easier as well as share files and information more easily. Furthermore, Widow 7 desktop includes more advanced network security facilities that reinforce corporate networks from vulnerability to hackers (Alam, 2011).

Budget Required To Change Global Merchandise Corporation Network to widow 2008 R2 server

Server Related Costs

Global Merchandise Corporation will buy 20 Widows server 2008 R2 at a cost of $ 5,500 each.

Internal Labor Cost

The organization is estimated to use approximately 200 man-hours for IT engineering time on for implementing DirectAccess and BranchCache for the whole organizations infrastructures.

Training Related Costs

The organization will undergo an extra cost to train the workforce on how to run the new system. The employees will not be trained on how to use the new Operating System, but will be trained on how to use widows 7 as a result of its new features.

Total Costs

The total cost to upgrade the Global Merchandise Corporation is will be high approximately $ 197,500. The amount of money will be used to upgrade the 2000, 2003 widow server and Linux server with widow 2008 server that is better in performance , connectivity as well as in security.

Similarly, some of the money reflected in the budget will be used to buy appropriate software and hardware required to transform the existing XP and widow 2000 desktops to widow 7 desktops as well as configuring the existing network to accommodate the new changes. Moreover, some money will be used to pay for the IT-labor required for transforming the organization’s network.

Furthermore, there will be some extra money that will be used for training the employees to use widows 7. Nevertheless, despite the high costs associated with this change, the long term benefits are bigger in terms of improved performance and reduced costs of operations that will associated with the new system.

Reference List

Alam, S. (2011). Advantages of Windows 7. New York: Prentice Hall

North, J. (2010). The Total Economical Impact of Widows 7.New York: Prentice Hall.Shinder,D. (2010). Windows Server 2008 R2 Remote Access Options: Enterprise Security. Cambridge: Cambridge University Press.

Williamson, T. (2009). Common Operating System. New York: Prentice Hall