Historical Budgeting
Setting budgets based on previous year's actual figures, adjusted for expected changes.
Real World
A school canteen sets next year's food budget by taking last year's spend of £80,000 and adding 5% for expected food price inflation — a classic incremental/historical approach.
Exam Focus
For evaluation questions, weigh the simplicity advantage against the key weakness that it entrenches past inefficiencies rather than questioning them.
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