Feedback / feedforward Flashcards
Describe feedback control
Feedback control is the comparison of actual results against expected results and if there is a significant difference, then it is investigated and if possible and desirable it is corrected.
It is defined as:
‘Measurement of the differences between planned outputs and actual outputs achieved, the modification of subsequent action and/or plans to achieve future required results. Feedback control is an integral part of the budgetary control and standard cost system.
Corrective action that brings the actual performance closer to the target or plan is called negative feedback.
Corrective action that increases the difference between actual performance and the target or plan is called positive feedback.
Describe feedforward control
In this system the aim is to anticipate problems with the aim of preventing them from occurring. Feedforward control should be used in conjunction with feedback control.
Feedforward is more proactive and aims to anticipate problems and prevent them from occurring.
It is defined as the ‘forecasting of the difference between actual and planned outcomes and the implementation of actions before the events, to avoid such differences’
Whereas feedback is based on a comparison of historical actual results with the budget for the period to date, feedforward looks ahead and compares:
- The target or objectives for the period, and
- What the actual results are now forecast.
What are the advantages and disadvantages with feedforward control
Feedforward control reporting offers the key advantages that it is forward-looking. It informs management what is likely to happen unless control measures are taken. Management can compare their targets for the period with current expectations.
In contrast, feedback control is backward-looking, and historical variances or differences from plan are not necessarily a guide to what will happen over the full budget period.
A problem with feedforward control is that control reports should be produced regularly, which means that forecasts must be updated regularly. To implement an efficient feedforward control system, it is therefore necessary to have an efficient forecasting system. Forecasts might be prepared using computer models, with revisions to the forecast each month based on updated information about actual results to date, and where appropriate by making alterations to the basic assumptions in the model
