Managers often use a variety of tools and techniques as they develop plans and make decisions. Forecasting is one widely used method. Forecasting is the process of developing assumptions or premises about the future. Sales or revenue forecasting is especially important. Many organizations also rely heavily on technological forecasting. Time-series analysis and causal modeling are important forecasting techniques. Qualitative techniques are also widely used.

Managers also use other planning tools and techniques in different circumstances. Linear programming helps optimize resources and activities. Breakeven analysis helps identify how many products or services must be sold to cover costs. Simulations model reality. PERT helps plan how much time a project will require.

Other tools and techniques are useful for decision making. Constructing a payoff matrix, for example, helps a manager assess the expected value of different alternatives. Decision trees are used to extend expected values across multiple decisions. Other popular decision-making tools and techniques include inventory models, queuing models, distribution models, game theory, and artificial intelligence.

Various strengths and weaknesses are associated with each of these tools and techniques, as well as with their use by a manager. The key to success is knowing when each should and should not be used and knowing how to use and interpret the results that each provides.