Budgeting & Forecasting › Zero-Based Budgeting

How are decision packages ranked in ZBB?

Intermediate

Answer

Packages are ranked by their contribution to organizational objectives and value for money, typically by senior management, from most to least essential (e.g., legally required and core activities first, discretionary ones last). Resources are then allocated down the ranked list until the budget is used up, so lower-priority activities may be cut.
Real-world example Statutory and core-service packages rank above discretionary training, which is funded only if money remains.

Common follow-ups: What ranks highest? | What happens to low-ranked packages?