Weibull-based Time-phasing of Budget Expenditures

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Authors
  1. Sokri, A.
Corporate Authors
Defence R&D Canada - Centre for Operational Research and Analysis, Ottawa ON (CAN)
Abstract
The assessment of financial positions and subsequent reallocation of resources between various capabilities or business lines is at the centre of any private or public sector budgeting process. This in-year budget utilization process is particularly crucial in public sector organizations due to financial regulations that require unspent budget dollars to be “lapsed”. Lapsed funding implies the loss of funding for a given fiscal year, i.e., that money is permanently unavailable to the organization. In order to facilitate the optimal reallocation of budgets among capabilities in-year, a probability-based approach was developed in this study to model expenditure rhythm. Expenditure rhythm is the time-phasing of budget expenditures over a given fiscal year. The methodology was demonstrated in a use case analysis. A sensitivity analysis was conducted to address the impact of model parameters on the results. The proposed model provides financial managers the ability to respond whenever the expenditures are higher or lower than expected.

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Report Number
DRDC-CORA-TM-2012-224 — Technical Memorandum
Date of publication
01 Sep 2012
Number of Pages
36
DSTKIM No
CA037057
CANDIS No
536713
Format(s):
Electronic Document(PDF)

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