Abstract
To introduce the concepts of capital and operating budgets. To describe the process for developing a capital budget. To introduce the concept of capital rationing. To consider capital budget prioritization, based on returns, risks, and criticality of assets. Outcomes After reading this chapter you will know:
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The difference between capital and operating budgets;
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The typical structure of capital budgets;
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The process for developing capital requirements for particular equipment types and consolidating them across types;
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The meaning of capital rationing and how it affects budgets;
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Methods of dealing with capital rationing including prioritization based on financial return, equipment criticality, equipment age, and condition and risk;
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How to summarize the capital budget and to be aware of factors involved in managing the capital project portfolio.
If you will the end you must will the means.
(A parliamentary saying).
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© 2015 Springer International Publishing Switzerland
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Hastings, N.A.J. (2015). Capital Planning and Budget. In: Physical Asset Management. Springer, Cham. https://doi.org/10.1007/978-3-319-14777-2_12
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DOI: https://doi.org/10.1007/978-3-319-14777-2_12
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Publisher Name: Springer, Cham
Print ISBN: 978-3-319-14776-5
Online ISBN: 978-3-319-14777-2
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