Reference no: EM133503295

A flexible budget is a budget that adjusts to changes in activity levels or other factors that may impact costs. In the case of a new clinic in a newly built community, construction costs may be difficult to estimate accurately due to factors such as the lack of information on local suppliers, construction costs, and other expenses.

A flexible budget would allow for adjustments to be made as construction progresses and costs become more clear. For example, if the cost of building materials is higher than expected, the budget can be adjusted to account for the increased costs. Similarly, if there is a delay in construction due to weather or other issues, a flexible budget would allow for adjustments to be made to the budget to account for the delay.

A static budget, on the other hand, is a budget that is based on a fixed set of assumptions and does not adjust to changes in activity levels or other factors. While a static budget may be easier to create and manage, it may not be as accurate as a flexible budget in situations where costs are difficult to estimate accurately.

Overall, a flexible budget would provide more flexibility and allow for adjustments to be made as needed. This would be especially important in a situation where construction costs may be difficult to estimate accurately. By using a flexible budget, the hospital network would be able to better manage the costs of construction and ensure that the project stays within budget.