Question - 01 Due to a slump in company sales, the manager of the research & development department has been asked to reduce his overall budget. Head Office would like the 2016 budget to be 5% lower than the 2015 actual cost. List and explain the choices the manager has when dealing with this request. (5 marks)

Question - 02 In past years the research & development manager has observed that, whatever budget he proposed, upper management would cut it by 5%. What should he do to ensure that he had a budget sufficient to meet his operational needs?