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Explanation:

“Exact” does not make for a favourable adjective as far as describing the “planning techniques” is concerned. This eliminates options 1, 2 and 5.
Between options 3 and 4, the nouns “improvement” and “reduction” make for a better fit with the “firms' notions” and “incidents of mistakes”. “Increase in firms' notions” does not make sense logically.
Hence, the correct answer is option 3.

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