1
Q
Description
A
Budget process that starts from maximum constraint
2
Q
Advantage
A
Theoretically the right way to budget
3
Q
Disadvantage
A
Very Slow and costly - Because each year the budget has to be redone from the start with an updated forecast
4
Q
What is limiting factor analysis used for?
A
To maximise contribution per limiting factor
5
Q
Limiting factor analysis procedure
A
*Identify total amount of each factor
*Calculate contribution of each product per unit of limiting factor
*Rank products high to low according to contribution per limiting factor.
Allocate capacity to maximise output pf highest ranked product an then work down.
