ShmoopTube

Where Monty Python meets your 10th grade teacher.

Search Thousands of Shmoop Videos

Econ: What are Planning Horizon and Infinite Horizon? 5 Views


Share It!


Description:

What are Planning Horizon and Infinite Horizon? Planning horizon refers to the projected timespan that a company’s future plan will take to be implemented and successfully completed. An infinite horizon is a scenario where there is no specifically defined timeline goal to a future plan, thus it remains open ended to be adjusted as required.

Language:
English Language

Transcript

00:00

And finance Allah shmoop What are planning Horizon and infinite

00:06

horizon All right people You go to the doctor for

00:10

a routine checkup and get some sobering news after you

00:14

turn your head and cough you picked up a parasite

00:16

from a toilet seat at the mall And while there's

00:19

a worm like creature in your belly growing at an

00:22

exponential rate well right now it's about the size of

00:24

a hot dog By tomorrow it will be the length

00:26

of an average garden hose and you'll probably be bulging

00:29

at the seams in excruciating pain Within a couple days

00:33

the warm will likely have burst through your body Leaving

00:35

you is a pile of goo Is it slippers off

00:37

to the mall to lame or eggs in the bathroom

00:39

But for now you're in the hot dog stage You

00:42

can still move around You can still do whatever you

00:44

want But you're thinking How are you going to spend

00:47

that last day Brush your teeth Finish your taxes politely

00:51

return all the work emails sitting in your inbox Ari

00:54

The whole bunch of donuts Yeah probably not More likely

00:57

you'll empty out your bank account and catch the fastest

00:59

flight to Vegas Okay same doctor's visit Different result Everything

01:03

checks out You're going to live a long life That's

01:06

the good news The bad news No teeth brushing tax

01:09

doing email returning all that stuff all back on the

01:12

table all part of your itinerary Now in your life

01:14

your time horizon matters You make different decisions based on

01:19

Well when you look on ly in the short term

01:21

than you would if you were looking at the longer

01:24

term a long timeline toe worry about things Which brings

01:27

us to the difference between planning horizon and infinite horizon

01:31

Okay a planning horizon is the length of time into

01:34

the future that a strategic plan covers Think Stalin's five

01:38

year plans and you know old Russia or in a

01:40

slightly gentler vein a company strategic quarterly plan Like the

01:44

next thirteen weeks here's what we're going to dio or

01:46

your program to lose twenty pounds in twenty days Yeah

01:49

good luck with that An infinite horizon refers to the

01:52

long long long term staring wistfully at the window to

01:56

an unknowable future may be a time of robot servants

01:59

and flying cities are maybe conquest by bug creatures from

02:02

space Who knows So how does this notion come into

02:05

play in a real life today Well think about uber

02:07

in the Ridesharing company's planning horizon They envision transitioning from

02:11

humans using their cars to company owned self driving vehicles

02:15

It's not gonna happen tomorrow It's a long term goal

02:18

but it's within their planning horizon But on the infinite

02:21

horizon while someone might invent teleportation like cars or self

02:25

driving or otherwise would then become irrelevant And uber's plan

02:29

is shot And that's maybe a good thing too for

02:31

uber because while self driving cars might be nice but

02:33

they're no match for conquering bug people from space hopefully

02:37

we'll just be able to you know teleport our way 00:02:39.685 --> [endTime] out of those problems

Up Next

GED Social Studies 1.1 Civics and Government
39794 Views

GED Social Studies 1.1 Civics and Government

Related Videos

Fake News
11938 Views

How do you tell fake news from real news?

Finance: What is Bankruptcy?
260 Views

What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They t...

Finance: What is a Dividend?
1777 Views

What's a dividend? At will, the board of directors can pay a dividend on common stock. Usually, that payout is some percentage less than 100 of ear...

Finance: How Are Risks and Rewards Related?
589 Views

How are risk and reward related? Take more risk, expect more reward. A lottery ticket might be worth a billion dollars, but if the odds are one in...