Rahul started a business of preparing and supplying sweets through home delivery at a place that is used both for production and as a showroom for sale in New Delhi. He made a plan forecasting the sales of different types of sweets in various areas of New Delhi for each month of the year to earn a profit of 15% on capital employed. He set a sales target of ₹1000000 in the current year with an 8% increase every year. He set the criteria of selecting suppliers from whom he would make purchases of raw material. The planning paid off and the business was able to achieve its targets.

Rahul announces that no smoking in the factory is allowed. Strict action will be taken for those who smoke in the factory.

Which type of plan is indicated in the above statement?

Rule

The correct answer is option 2- rule.

Rules are specific statements that inform what is to be done. They do not allow for any flexibility or discretion. It reflects a managerial decision that a certain action must or must not be taken. They are usually the simplest type of plans because there is no compromise or change unless a policy decision is taken.