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ACCA Strategic Professional · Advanced Performance Management · Data science and analytics

Brelmont Logistics replaces its annual static budget with a rolling forecast updated monthly using live telematics and fuel-price data feeds. Which is the most likely performance management benefit of this change?

The main benefit is that managers can adapt resource allocation more quickly to changing conditions. Monthly rolling forecasts fed by live data keep plans current. They do not fix targets, eliminate slack completely, or remove the need for variance analysis, since forecasts remain uncertain.

  1. ABudget targets become fixed for the whole year, which improves accountability
  2. BManagers can adapt resource allocation more quickly to changing conditionsCorrect
  3. CBudgetary slack is eliminated entirely because data is real time
  4. DThe need for variance analysis is removed because forecasts are always accurate

Explanation

Frequent reforecasting with live data lets managers respond to changes and reallocate resources sooner. Fixed targets are the opposite of rolling forecasts. Slack can be reduced but not eliminated entirely, and variances still need analysis because forecasts are never perfectly accurate.

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