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Budgeting

7.3 Feedback and feedforward control

Feedback control

Here the aim is to correct problems that have been discovered at the period end
when the actual results are compared with the budget.

Feedback happens after the event and discovers that something has gone wrong (or
right). It is obviously too late to affect the result that has just happened, but the idea
is that if we can understand what went wrong in the previous period, then we can
stop the problem from recurring.

It is therefore a reactive system of control.

Feedforward control

Here the aim is to anticipate problems with the aim of preventing them from
occurring.

Feedforward is the comparison of the results that are currently expected in the light
of the latest information and the desired results. If there is a difference, then it is
investigated and corrected.

It is therefore a proactive system of control.

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