Resource Allocation

Posted in Marketing and Strategy Terms, Total Reads: 441
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Definition: Resource Allocation

Resource allocation refers to allocation of resources for various uses in business processes. Resource allocation model is not about just assigning resources for various activities but it also means how and when the resources should be used to get maximum output. Resource can be time, raw materials, manpower, capital, land etc. In any situation, there is one or more resource that is scarce. Therefore resources need to be utilized with proper planning. This is where resource allocation is important.


Often managers fail to plan the allocation of resources properly which leads to either the project being ceased or lead to huge losses which are borne by the organization. So for optimized utilization of resources, there is a need for resource allocation models.


In case of marketing, resource allocation model are fed with inputs and constraints and model comes with output that are optimized. For example: market segments, customers’ size etc. are inputs and model gives expected profit and expected sales as the output. The resource allocation model in marketing helps in answering the following questions, they are:

• How much should be the fund?

• How much fund should be allocated to each market segment or product category?

• How should the fund be distributed to various managers?

• How much funding should be done to each region?

• What should be the number of salesperson and their salary?

• What should be the optimized price of product such that no loss occurs?

• What should be the sales figures based on past trends?

• What should be the promotion strategy and spending?

These answers are provided by the model once input and constraints are fed into it.

Hence, this concludes the definition of Resource Allocation along with its overview.

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