Activity Based Budgeting (ABB) in Supply Chain Management
Activity-Based Budgeting (ABB) is an approach to budgeting where a company uses an understanding of its activities and driver relationships to quantitatively estimate workload and resource requirements as part of an ongoing business plan. Budgets show the types, number of and cost of resources that activities are expected to consume based on forecasted workloads. The budget is part of an organization’s activity-based planning process and can be used in evaluating its success in setting and pursuing strategic goals.
Activity-Based Budgeting (ABB) is a budgeting approach that focuses on identifying and analyzing the activities that incur costs within an organization and then allocating resources based on the cost of these activities. ABB emphasizes understanding the relationship between activities, resources, and outputs, enabling more accurate and strategic financial planning.
