Explain ranking of decision packages - zero base budgeting, Managerial Accounting

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Explain Ranking of decision packages - zero base budgeting

Ranking of decision packages: by ranking the decision packages a company will be able to weed out a lot of marginal efforts. The scarce resources of organization should be directed to most promising line only. Ranking implies determining the priorities among the available decision packages. Ranking of decision packages is an important exercise and should be attempted only by those who have the requires knowledge and experience. Initial ranking can be conducted by sectional managers and it can afterwards be reviewed by a committee including the departmental heads. A decision package is ranked keeping the following points in view:

Necessity of introducing programmers

Technical competence of company for attempting the programmers

Economic benefit analysis relating programmers

Study of risk involved in abandoning the programmer

 


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