A planning model is a set of Analyst objects whose purpose is to generate specific plans using a variety of data inputs, assumptions, and calculations. We will discuss the Analyst objects in greater detail in Chapters 4 through 7. In practice, a model is named after the output it produces. An output can be a specific budget for product lines or it can be a category of expenses consisting of several general ledger accounts, such as payroll.
Once you have identified the model output, break it down into its inputs, assumptions, and calculations. For example, a salary plan may be the outcome of the inputs of employees and positions, their current salary, earned merit increases, and bonuses. The salary for newly-hired staff may be assumed based on their position. To produce the salary plan, the model would calculate the merit increases and bonuses for each employee by multiplying the salary by the merit and bonus percentages and then by adding the results...