1
Question
Zero based budgeting involves __________________.
Zero based budgeting involves __________________.
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Solution
The correct option is C Ranking process problems
The limitations of ZBB, which arise due to operational problems, are as follows:
- Implementation Problems: The concerned managers should continue in the same decision units. If they are transferred frequently to other departments, it may lead to a waste of time and resources in training and developing new managers.
- Formulation Problems: Considerable problems may arise while formulating decision packages.
- Ranking Problems: Problems may arise in the ranking of decision packages. General Managers may like to continue their favorite projects for the reasons best known to them. The ranking may also become difficult when there are a large number of decision packages, particularly in a multi-product manufacturing firm.
The limitations of ZBB, which arise due to operational problems, are as follows:
- Implementation Problems: The concerned managers should continue in the same decision units. If they are transferred frequently to other departments, it may lead to a waste of time and resources in training and developing new managers.
- Formulation Problems: Considerable problems may arise while formulating decision packages.
- Ranking Problems: Problems may arise in the ranking of decision packages. General Managers may like to continue their favorite projects for the reasons best known to them. The ranking may also become difficult when there are a large number of decision packages, particularly in a multi-product manufacturing firm.
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