Description: Judgment-Based Budgeting is a budgeting approach that relies on the experience and judgment of managers to allocate financial resources within an organization. Unlike other more quantitative methods, this approach focuses on intuition and practical knowledge of leaders, who assess the needs and priorities of their departments or projects. This type of budgeting is particularly useful in dynamic and changing environments, where historical data may not be sufficient to anticipate future needs. The main characteristics of Judgment-Based Budgeting include flexibility, adaptability, and the ability to respond quickly to changing circumstances. This method allows managers to make informed decisions based on their understanding of the operational and strategic context of the organization. In the realm of financial operations and cost optimization, this approach can be crucial for identifying areas where expenses can be reduced, as it enables leaders to evaluate investments in technology and resources based on their experience and market conditions. In summary, Judgment-Based Budgeting is a valuable tool that combines intuition with financial management, facilitating resource allocation that is more aligned with the actual needs of the organization.
