Chapter 6

Question 1

Economists who analyze labour supply will often look at unemployment rates by:

Answer 1

> will often look at unemployment rates by province, by occupation, and by designated group.

Question 2

Human capital can be obtained from a source that is :

Answer 2

> Human capital can be obtained from a source that is either internal to the organization (current employees) or external (individuals currently not employed by the organization), or, more commonly, from a combination of these sources.

Question 3

What source for human capital is preferred?

Answer 3

> Many organizations give preference to internal supply, because selecting these individuals for training and development, and subsequent promotion, enables the organization to reinforce employee loyalty and performance

Question 4

Other reasons for giving preferential consideration to your own workforce to fill job openings include the following:

Answer 4

1) Current employees are already socialized to the norms, rules, and procedures of your organization, and so organizational fit is ensured.

2) The employer possesses detailed knowledge (as listed on its human resource management system skill inventories) of the employees’ performance and knowledge, skills, abilities, and other attributes (KSAOs) over time (e.g., work history and experience).

3) Internal labour markets provide employees some protection from economic downturns, as employees can move from one job type to others.

Question 5

When job analysis is done properly throughout the organization, it is useful because:

Answer 5

1) it uncovers all the KSAOs/competencies that are performed, and identifies in what jobs or other capacities those KSAOs/competencies are performed.

2) This inventory is instrumental in determining training needs, and in performing a gap analysis between the strategic organizational KSAOs/competencies required to implement the firm’s value proposition and the KSAOs/competencies that are currently present within the organization.

Question 6

What does a strategic analysis uncover?

Answer 6

> A strategic analysis can uncover the most important tasks or activities at the organizational level that are required to implement the value proposition, and the critical KSAOs or competencies necessary to perform those tasks or activities can be inferred.

Question 7

What does a gap analysis compare?

Answer 7

> A gap analysis compares the KSAOs/competencies that are present within the organization with those that are necessary to implement the value proposition, and adjustments to the organization’s stocks of human capital and HR practices may then be made.

Question 8

what are employee segments?

Answer 8

> When different groups of employees work in the same job but have different work or career preferences

Question 9

What should firms do with employee segments?

Answer 9

> Researchers suggest that firms should understand each of the employee segments that comprise their human capital contingent, and provide HR practices that appeal to each of these segments in unique ways

Question 10

Boudreau and Jesuthasan (2011) propose three questions to understand and influence supply:

Answer 10

1) What are the critical human capital segments? To answer this question, HR practitioners must have a clear understanding of the organizational activities that bring value to the customer.

2) What response do we need from each of these segments?

3) What features of the employment deal create the best response at the lowest cost?

Question 11

Segmenting workers along unique sets of attributes that make the employment contract attractive allows forecasters to do what?

Answer 11

> to better understand and model how to influence the supply of each of these employee groups. Policies such as recruitment and retention strategies that appeal to these unique segments provide the means through which planners can influence the supply of human capital.

Question 12

When firms do not have the policies in place or the resources to provide an adequate supply of human capital from within, adequate supply must be found where?

Answer 12

> outside the firm

Question 13

When supply is inadequate, the result could be due to :

Answer 13

> could be due to a labour shortage, where there simply are not enough workers for the number of jobs available, or to a skills gap, where there is an insufficient number of workers who possess the skills necessary to perform the job

Question 14

A 2016 survey for the Canadian Internet Registration Authority (CIRA) found that despite having competitive recruitment and selection practices, what percentage of IT companies had trouble filling positions?

Answer 14

almost 50 percent of the information technology (IT) companies surveyed claimed they had had trouble filling IT positions in the previous year

Question 15

Some research suggests that the skills gap is limited to what?

Answer 15

> Some research suggests that the skills gap is limited to particular geographic regions or knowledge sectors.

Question 16

Aside from the limit to geographical regions/knowledge sectors, what other areas cause a gap?

Answer 16

> However, for many jobs, research suggests that a large portion of the gap may be brought on by organizations. Firms that do not have a development pipeline, that spend little on training, and that are dependent on external hiring for most skilled workers are especially at risk for not being able to hire adequate numbers.

> Another contributing factor to an inflated gap is found in the recruitment and hiring practices popular in firms today. Rather than selecting based on knowledge, skills, abilities, and aptitudes derived from job analysis, many firms prioritize work experience as a minimum qualification.

Question 17

Firms that want to avoid unfilled jobs over the long term need to do what?

Answer 17

> need to align their strategic activities with their critical talent segments, and incorporate training, development, and retention strategies to reduce their need for external hiring.

Question 18

If employers cannot find a sufficient supply of labour for certain jobs, they can either do what?

Answer 18

> they can either change the nature of the job, train workers themselves, or look at other labour pools.

Question 19

What do Canadian organizations have a poor track record in? What study backed this up and what was the result of it?

Answer 19

> However, Canadian organizations have a relatively poor track record in training employees, compared to other countries.

> according to a survey of executives in 27 countries, only 38 percent of businesses in Canada offer training to teach technical skills to employees in the highly desirable STEM areas (science, technology, engineering, and math), compared to 51 percent in the United States and even more in Colombia and Malaysia.

Question 20

Another employment source that has only recently begun to be utilized is what?

Answer 20

> is the neurodiverse community. Neurodiversity refers to neurological differences that are recognized as natural human variation.

Question 21

In order to hire neurodiverse individuals or members of any of Canada’s protected groups, organizations should use what?

Answer 21

> should use HR practices that incorporate job analysis in order to understand all job-relevant attributes of the work, develop science-based selection practices that seek to reduce bias and control for other errors, and provide realistic job previews so that working conditions are well understood beforehand.

Question 22

Job analysis plays a critical role in removing bias in expectations around what ?

Answer 22

> around what is required to perform a job, and in changing mental models around the general attributes necessary for the job or workplace that may persist and that do not hold any relation to actual job requirements.

Question 23

A survey of 1,500 older workers (50 and over) revealed that older workers desire many of the same things that other workers rank as important:

Answer 23

1) Learning and development opportunities

2) Job autonomy

3) Recognition and respect

4) Mentoring opportunities

5) Social support and a supportive organizational climate

6) Compensation

Question 24

Governments control the supply of labour in many ways. Describe some:

Answer 24

. Provincial governments, for example, determine the number of places available in professional programs, such as nursing, and trade apprenticeships, such as electricians.

> The government also plays a key role in determining the number of immigrants admitted to Canada. By increasing the spaces available to qualified professionals and tradespeople, the government can alleviate demand for these workers in targeted occupations.

Question 25

However, there remains a shortage of Canadians who are available to work. For example, Statistics Canada estimates that at the end of 2021, there were what kind of jobs and how much?

Answer 25

> over 900,000 unfilled jobs, mostly in health care; social assistance; retail trade; and professional, scientific, and technical services

Question 26

Any presentation on HR supply would be incomplete without:

Answer 26

> Any presentation on HR supply would be incomplete without a discussion of the need for organizations to monitor and control levels of absenteeism and employee turnover.

Question 27

high levels of involuntary turnover normally signify what?

Answer 27

> normally signify a mismatch between the individual and the organization

Question 28

With continued labour shortages, retention programs are no longer an option for most North American companies; they are fast turning into:

Answer 28

> into a key requirement for organizational survival

Question 29

What are hard and soft costs to replacing /acquiring workers?

Answer 29

> “hard” costs (e.g., advertisements, headhunter and recruiting fees, interview training and travel costs, administration expenses, cost of lost production, bonuses or increased salaries acting as inducements to join, and so on), > there are also the “softer” elements (such as lost business and customer contacts, decreased quantity or quality of work due to training and learning-curve gaps, orientation and training time, decline in team morale and productivity, and increased turnover due to the “follow me” effect)

Question 30

It is estimated that the cost of replacing a trained worker ranges in what percentage to their salaries?

Answer 30

> ranges from 70 to 200 percent of the departing person’s annual salary

Question 31

Organizations that demonstrate flexibility and a genuine effort to assist their employees are perceived to be :

Answer 31

> perceived to be more attractive places to work

Question 32

Retention can be greatly facilitated by offering:

Answer 32

> by offering effective communication programs; maintaining an enjoyable and collegial work atmosphere; designing meaningful jobs; formulating and administering performance and compensation systems that identify and differentially reward better performers based on clearly communicated criteria; and offering more flexible and attractive work arrangements > Mentoring programs have also been found to be highly effective for retention through positively influencing individual commitment and potential for career success, and thereby reducing turnover intentions

Question 33

Organizations are beginning to apply operations and marketing principles by segmenting human capital according to :

Answer 33

> sets of desirable employment attributes

Question 34

What is Mass customization in HR:

Answer 34

> Mass customization in HR refers to the way in which the major attributes that influence the employee relationship with the firm can be blended and moulded to suit the individual needs of the employee.

Question 35

What is mass customization intended for in HR?

Answer 35

> Mass customization of HR is intended to help maximize the employee experience and ultimately enhance retention.

Question 36

what are some of the steps organizations can take to help attract and retain talented employees?

Answer 36

1) Train managers in strategies for the retention of employees, and hold them accountable for retention. 2) Pay is not the main reason for losing talent; pay attention to “toxic” bosses and co-workers, bad management practices, and a lack of autonomy and respect at work. 3) Implement flexible working arrangements to facilitate work–life balance (e.g., flexible work hours, compressed workweek, telecommuting, job sharing, daycare centres, and so on). 4) Reward fairly, consistently, and differentially on the basis of performance and results. Give recognition to employee preferences for different types of work benefits (time off, non-monetary rewards such as travel or goods, tuition assistance, pension plans, life insurance, and so on). 5) Hold regular feedback and career development discussions with your employees. 6) Recognize that talented, highly motivated employees do not view training as a discretionary item that should get cut during the first round of annual budget reviews! 7) Deal with “slackers” and underperformers. Talented employees resent being burdened with additional stress and workload. 8) Reward organizational seniority in addition to rewarding performance. 9) Identify “high turnover risk” occupations, classifications, and personnel, and develop appropriate talent retention strategies. 10) Develop a managerial academy to teach talented employees the technical and interpersonal skills necessary to assume higher managerial positions in the future. 11) Review and pare to a minimum the following potential “dissatisfiers”: rules, regulations, micromanagement, policy manuals, meetings, and so on. 12) Take action on talent management; don’t just meet, discuss, or prepare a report.

Question 37

The first step in supply analysis is:

Answer 37

> is an examination of the number and capabilities of current employees. Skill inventories and management inventories contain information on the capabilities of your employees

Question 38

What is a skill inventory?

Answer 38

A skills inventory is an individualized record held on each employee except those currently in management or professional positions. Typically, a skills inventory contains information for each individual on select areas: > personal; > education/training/skill competences > work history > performance ratings > career info > hobbies/interests

Question 39

This skills inventory record is entered into the organization’s human resource management system (HRMS) database and can be searched when looking for people with the skills and competencies required by a specific job. For this reason, skills inventories must be:

Answer 39

> must be kept current, and employees should be given frequent opportunities to update or correct their personal entries; otherwise, an employee may not be considered for a job that they could fill successfully.

Question 40

Management inventories can be considered to be enhanced skills inventories, because they contain all the same information as skill inventories but also:

Answer 40

1) A history of management or professional jobs held. 2) A record of management or professional training courses and dates of completion. 3) Key accountabilities for the current job (i.e., organizational resources, including the size of the budget controlled, number of subordinates, important organizational outcomes for which the incumbent is primarily responsible). 4) Assessment centre and appraisal data. 5) Professional and industry association memberships.

Question 41

What are the most popular technique used for contemporary supply-side HR planning applications in medium-sized to large organizations?

Answer 41

> Markov models are the most popular technique used for contemporary supply-side HR planning applications in medium-sized to large organizations

Question 42

What is the primary factor in the decision to use Markov modelling?

Answer 42

> Organizational size is a factor in the decision to use Markov modelling because the process involves estimating the probability of moving from one job to another.

Question 43

A Markov model, also referred to as a probabilistic (using probabilities of various movement options) or stochastic model, determines what?

Answer 43

> determines the pattern of employee movement throughout an organization’s system of jobs using a set of mutually exclusive states for movement into or out of a particular job > Markov analysis produces a series of matrices that detail the various patterns of movement to and from the wide variety of jobs in the organization. As such, it provides a method to model the flow of human capital between jobs within the organization to give a deeper understanding of how employee movement affects the supply of human capital beyond a simple estimate of turnover rates.

Question 44

According to researchers, when considering employee movement patterns in the organization, there are five mutually exclusive states in which an employee can reside:

Answer 44

1) Remaining in the current job 2) Promotion to a higher classified job 3) A lateral transfer to a job with a similar classification level 4) Exit from the job (e.g., termination, layoff, voluntary leaving by the employee) 5) Demotion (which is relatively rare)

Question 45

Markov models do not examine individual employees but instead examine:

Answer 45

> examine overall rates of movement between various job levels, and this movement between jobs is based on historical movement patterns

Question 46

Under the marklov model, what is the the pattern of employee movement?

Answer 46

> It is normally assumed, for calculation purposes, that the pattern of employee movement is relatively stable over time. If this is not the case, then adjustments have to be made to the historical data to allow them to be used for HR planning in the present day.

Question 47

Markov model data should be based upon what?

Answer 47

> should be based upon movement during “typical” business operations. > However, if environmental conditions change dramatically, the information should be adjusted, using the HR planner’s best judgment.

Question 48

Markov techniques depend on:

Answer 48

> depend on stable transition probabilities, so dynamic and unstable environmental scenarios may preclude the effective usage of Markov models

Question 49

There are three main steps to using a Markov model for HR planning purposes:

Answer 49

1) Collect historical data on mobility rates between jobs in the organization (many organizations collect data on turnover rate, promotion rate, and rates of lateral transfers and demotions). 2) Based on these data, develop matrices to forecast future movement between jobs. 3) Use the forecasts of the model to analyze HR policies and programs, and instigate the necessary adaptive measures (Zeffane and Mayo 1995, 6–17.).

Question 50

By using employee movement data from the recent past, it is possible to calculate what?

Answer 50

> transitional probabilities > By multiplying the total number of employees or positions in a particular job by the associated probabilities for each of the five possible movement scenarios, the HR planner derives numerical data on employee flow patterns throughout the organization, and between various job levels.

Question 51

The sequences of movements between various job states are referred to as:

Answer 51

> are referred to as Markov chains > Markov chains are derived from the Markov model and can be considered a subset of the model, as they refer to movement sequences between specified job states, not the overall matrix.

Question 52

The Markov model enables us to determine the:

Answer 52

> enables us to determine the specific number of replacements or successors required for any job family annually, as well as for specified future planning periods (based on normal attrition assumptions), which can help the HR function to be more proactive in its external recruitment programs. > Additionally, we can calculate the chain of movement from an entry-level job all the way to the CEO appointment, along with forecast times of arrival, stay, and departure, in conjunction with breaks in career progression along the way.

Question 53

What is the avg length of a markov chain?

Answer 53

> 3

Question 54

Therefore, a Markov model has great value for determining the following:

Answer 54

1) The number of employees who move annually, and over specified time periods, between various job levels 2) The number of external hires that are required by the organization, and where the specific jobs are needed 3) The movement patterns and expected duration in specified jobs associated with patterns of career progression for employees in the organization (i.e., career paths) (Tuma 1976, 338–360) 4) The number and percentage of all starters at a particular job level who will successfully attain a future target job level by a specified time period (Rowland and Sovereign 1969, 88–99; Glen 1977, 975–982)

Question 55

To summarize, for the process of Markov analysis, the planner would::

Answer 55

1) begin by determining the list of mutually exclusive states (promotion, transfer, termination, demotion, or status quo); 2) develop a matrix of jobs that are linked by career progression or historical movement, based on the pattern of transitions between jobs; 3) use historical data to determine the probability of moving from one state to another; and 4) populate the matrix with an initial distribution of job holders across the various states of the model.

Question 56

Markov models are often used to understand and predict what? What else can they be used for?

Answer 56

> Markov models are often used to understand and predict the flow of jobs in an organization; however, they can also be used to predict how jobs move at the industry level and to test the effects of policy changes on employee movements.

Question 57

What were the initial assumptions of the markov model?

Answer 57

The planners developed a set of assumptions that incorporate the various states nurses could occupy during their career. These states included: (1) working in the rural sector, (2) working in the urban sector, (3) working in the private sector, (4) working overseas, (5) doing a one-year specialty training course, and (6) leaving the profession.

Question 58

what was a difficult part of the marklov model?

Answer 58

> The difficult part of this model is determining the transitional probabilities of moving from one state to another. > This involved making many assumptions about the workforce and combining those assumptions with observations of past movements.

Question 59

After overcoming difficulties, the marklov model was run on what?

Answer 59

> The model was then run, making changes to assumptions and modelling policy interventions, such as how movements would change if nurses working in rural conditions were provided with an additional allowance.

Question 60

Markov models can be used in organizations not just for modelling employee movements between related jobs, but also to model the effects of what?

Answer 60

> the effects of policy changes on those movements by incorporating the assumptions of what the policy changes should do to the transitional probabilities.

Question 61

What is linear programming?

Answer 61

> Linear programming is a mathematical procedure commonly used for project analysis in engineering and business applications.

Question 62

How does Linear programming have utility?

Answer 62

> It has utility for HR planners because it allows us to determine the future supply of human capital based on achieving the best staffing outcome while taking into account certain constraints such as labour costs

Question 63

What does the linear model provide?

Answer 63

< The model provides the optimum or best supply-mix solution, and the best conditions obviously vary across organizations

Question 64

By providing the optimum level of human capital supply with respect to explicitly defined constraints or criteria, linear programming enables what?

Answer 64

> enables the calculation of what-if scenarios by changing or relaxing various model assumptions in order to determine the impact these changes will have on final numerical requirements for both internal and external supply.

Question 65

To use linear programming, assumptions have to be similar to those used :

Answer 65

> used in regression analysis > namely that the mathematical model has to contain variables that have linear relationships among the various constituent elements. If

Question 66

The province of British Columbia used linear programming to determine:

Answer 66

> The province of British Columbia used linear programming to determine the total number of students to admit to health care programs, the total number of nurses to train for management roles, and the total number to recruit from outside the region.

Question 67

Complex mathematical models such as linear programming and simulation have distinct advantages:

Answer 67

> they can integrate a large number of variables from across the organization, they are excellent tools for testing what-if scenarios and the impact of assumptions on forecasts, and they can simultaneously forecast both demand and supply.

Question 68

What is movement analysis?

Answer 68

> Movement analysis is a technique used to analyze the chain or ripple effect that promotions or job losses have on the movements of other employees in an organization > The total number of people movements is always greater than or equal to the number of vacant positions to be filled.

Question 69

Movement analysis enables the HR planner to :

Answer 69

> enables the HR planner to select the desired mix or percentage of internal and external supply for those positions requiring replacements, ranging from a promote-from-within policy to the other extreme of replacing losses entirely through external hiring.

Question 70

Professors at Simon Fraser University’s Faculty of Business Administration have uncovered four lessons in properly using internal labour markets to supply an organization’s staffing requirements, based on their study of a large manufacturing firm:

Answer 70

1) Managers should recognize that there are often multiple internal labour markets typically operating in one firm. 2) Managers should conceptualize their staffing task as managing a system of human resource flows. 3) Managers need to develop an appreciation for the temporal and situational contexts within which staffing decisions are made. 4) Staffing decisions themselves can be appropriately viewed as garbage-can models (a classic model of decision making) in which multiple issues and multiple criteria are typically invoked in matching individuals and jobs.

Question 71

Movement analysis can be performed for the organization as a whole, although analysts normally find it more useful to:

Answer 71

> to conduct separate analyses for each department, division, or functional area

Question 72

What is the normal planning time for movement analysis?

Answer 72

> the normal planning time horizon is one year, and starts with identifying the number of employees in each authority or compensation-band level at the start of the forecasting period. > Next, we consider changes in the level of staffing for the department—that is, whether we are going to increase the number of jobs in some or all authority levels or downsize to reduce the total number of employees in the department > we now turn to calculating the losses requiring replacement for each authority level of the department. We are interested only in losses > We add changes in staffing level to employee losses requiring replacement to give us the total number of positions requiring replacement. At this stage, having determined the total number of positions to be filled, the actual number of employee movements – as briefly described previously – can vary widely, depending on our organization or department’s desired policy concerning the supply mix of internal and external replacements.

Question 73

The decision to make or buy the inputs necessary to produce a product or service are based on factors such as:

Answer 73

> such as the strategic importance of the input, and the strength the supplier of the product has in capturing value.

Question 74

To buy human capital implies :

Answer 74

. hiring from the labour market, and to make human capital implies training and developing employees.

Question 75

The Government of Canada produces several forecasts of labour supply that can help planners to decide what jobs should receive more development and training attention in anticipation of external hiring challenges. The relevant forecasts produced by the federal government include the following:

Answer 75

> Job vacancy rate. Statistics Canada produces monthly estimates of the number of jobs that are unfilled as a proportion of all jobs, by geographical region and by industry. This can help planners to understand areas of the job market that are experiencing or are expected to experience a shortage or surplus of available labour. > Job openings by skill level. The Canadian Occupational Projection System (COPS) produces forecasts of job openings attributable to economic growth and employment growth, by skill level and industry. Planners can use these data to make longer-term estimates of labour shortage or surplus.

Question 76

By estimating the number of internal promotions and external hires, movement analysis can help planners to:

Answer 76

> can help planners to ensure that the firm is able to devote enough resources in the training and development of its current employees

Question 77

The vacancy, renewal, or sequencing model analyzes what?

Answer 77

> analyzes human capital flows throughout the organization by examining inputs and outputs at each hierarchical or compensation level

Question 78

Vacancy models have been found to have more predictive capacity than what model?

Answer 78

> acancy models have been found to have more predictive capacity than Markov models over short- and long-term periods (of three, five, and ten years)

Question 79

What is the common time frame for the vacancy model?

Answer 79

> although the common time frame for this model is one year into the future. It is important to calculate supply requirements one level at a time in a “top-down” fashion, beginning at the highest relevant level, because the normal direction of employee movement in an organization is from the bottom to the top.

Question 80

The rationale behind the vacancy model is simple:

Answer 80

> the supply needs at each salary level are determined by staffing changes—the number of employees promoted out of the level plus any losses (e.g., retirements, departures, terminations).

Question 81

Organizational policy is used to determine:

Answer 81

> is used to determine the extent to which these openings will be filled by internal and external supply.

Question 82

Overall, vacancies in the organization lead to :

Answer 82

> lead to a sequence of internal promotions from lower levels as the open positions are filled by replacements.

Question 83

The vacancy model identifies what?

Answer 83

> identifies the specific number of external and internal replacements required at each level and for the organization as a whole.

Question 84

After forecasting the demand for and supply of human capital, the difference between these two figures represents what two components and when?

Answer 84

> represents a surplus if the supply exceeds demand, or a gap if the demand exceeds supply. In the event of a gap, firms must hire externally in the short term but have a few more options over the long term.

Question 85

Although most organizations tend to devote considerable time and resources to the process of attracting new workers, a great many fall short of putting enough emphasis on what?

Answer 85

> putting enough emphasis on retaining the high-quality workers they currently employ.

Question 86

retention policy recommendations include the following:

Answer 86

> Greater importance should be given to identifying high-performing and high-potential employees, and their associated values, interests, needs, and so on, before they leave to work for competitors > Organizations should conduct a demographic analysis and compensation reviews by using their HRMS > Forming a “retention task force” that includes HR professionals, line unit managers, and senior executives. > Reinforcing employee loyalty and performance by “promoting from within” wherever possible. > Measuring turnover on an ongoing basis at corporate, division, and local levels, utilizing multiple measures. > Holding line managers responsible for retention. > Reviewing and addressing compensation and working condition issues before they become issues of dissatisfaction that prompt employees to leave the organization.

Question 87

Managing the supply of human capital is most effective when:

Answer 87

. Managing the supply of human capital is most effective when the stock and flow of that human capital are considered together and in detail.

Question 88

Human capital segmentation, Markov analysis, movement analysis, and vacancy models all consider what? What does this help reduce?

Answer 88

> all consider the current stock of employees and how the flow of those stocks will influence the supply. This level of detail can help to reduce the bullwhip effect that is known to affect demand and supply relationships.

Question 89

What is the bullwhip effect?

Answer 89

> occurs when errors in estimates of supply become amplified as those errors are compounded along the supply chain

Question 90

Forecasts are almost never what?

Answer 90

> absolutely correct

Question 91

But being precise is not the main objective of forecasting. What is important is understanding:

Answer 91

> is understanding what is worse: being wrong by underestimating supply or being wrong by overestimating supply.

Question 92

In order to reduce the costs of errors in forecasts, planners can do two things:

Answer 92

1) estimate the amount of error in forecasting, and 2) consider the costs of underestimates versus the cost of overestimates.

Question 93

Given what we know about the bullwhip effect, when demand estimates are based on production, sales, or some other organizational index, the error in that measure will tend to be:

Answer 93

> will tend to be compounded by subsequent estimates.

Question 94

What is the average error rate used for?

Answer 94

> Taking the average of the error rates over several years (or other relevant period) of estimates will provide some indication of the extent of the error and also its direction (that is, whether the estimates tend to undershoot or overshoot actual requirements).

Question 95

After assessing the amount of error in estimates, planners can examine what?

Answer 95

> After assessing the amount of error in estimates, planners can examine the costs of being wrong in either direction. > Planners must also consider what will happen if estimates are too high