When Decision Makers Distribute Funds as a Fixed Percentage of an Increase

question 4

Short Answer

When decision makers distribute funds as a fixed percentage of an increase (or decrease) to various activities, programs, and/or departments based on precedent, they are involved in ____________________.

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Definitions:

Life Cycle Cost

Encompasses all costs associated with a product or asset over its entire life, from acquisition through disposal.

Cost-plus Price

An approach where the selling price of a product is fixed by appending a set markup to the product’s per-unit cost.

Appraisal Costs

Costs associated with the inspection and testing of materials and products to ensure quality standards are met.

Defects

Imperfections or faults in a product that cause it to be unsuitable for its intended use or significantly reduce its usability.