SCENARIO PLANNING AS A TOOL FOR MANAGERIAL DECISION-MAKING IN PRODUCTION ACTIVITIES UNDER CONDITIONS OF UNCERTAINTY

Abstract

The current economic environment is characterized by profound volatility and unpredictability, posing significant threats to business survival. For the manufacturing sector, particularly animal feed producers, operations have been severely disrupted by geopolitical and economic shocks. Under these circumstances, traditional forecasting methods lose their reliability, creating a critical need for advanced analytical tools to support managerial decision-making. The purpose of this research is to explore and implement scenario planning as a strategic management instrument tailored for manufacturing activities under extreme uncertainty, focusing on the operational framework of LLC NVP Ukrzoovetprompostach. The relevance of the study stems from the urgent necessity of transitioning from reactive survival tactics to proactive resource management and technological modernization. To achieve this objective, the study employs a comprehensive set of general scientific and specific economic methods. Financial and ratio analyses are utilized to diagnose the liquidity, profitability, and efficiency of fixed asset utilization over a multi-year period. A comparative analytical method allows benchmarking the enterprise’s financial performance against direct industry competitors. Furthermore, a PEST analysis is conducted to map the macro-environmental forces affecting the national animal feed market. Finally, the scenario planning method is applied to synthesize diagnostic findings into actionable pathways. The results of the diagnostic phase revealed critical vulnerabilities within the target enterprise, including a substantial physical deterioration of fixed assets exceeding normative thresholds, insufficient absolute liquidity, and a lagging net profit margin. Based on these empirical findings, three divergent development scenarios were constructed for a one-year horizon. The optimistic scenario delineates a strategy of intensive technological growth, premised on favorable market conditions and external funding, allowing for the comprehensive replacement of outdated equipment. The baseline scenario models a gradual renewal strategy, relying on internal financing to target specific production bottlenecks. Conversely, the pessimistic scenario outlines a survival strategy in a deteriorating macroeconomic climate, necessitating strict cost-cutting measures, staff optimization, and the substitution of new equipment purchases with capital repairs. The practical value of the obtained scientific results lies in providing corporate management with a structured, adaptable matrix for decision-making. By integrating these specific scenarios into daily operations, managers can anticipate market shifts, allocate resources efficiently, and mitigate financial risks, ensuring the continuous optimization of production processes in a highly volatile environment.