A manufacturing system must have three basic components: Inputs – raw materials or parts that will be used in the manufacturing process. Processes – the methods and techniques used to transform the inputs into the desired output. Outputs – the products or services that are created as a result of manufacturing.

Budgeting is crucial and essential for manufacturing companies because:
1- Helps in Setting Realistic Goals
2- Enables Efficient Resource Allocation
3- Facilitates Timely & Effective Decision-Making