Modelling of the Risk of Budget Variances of Cost Energy Consumption Using Probabilistic Quantification
Budgets in organisational units are considered to be traditional management support tools. On the other hand, budgetary control is the essence of control measures, allowing for the increase in the efficiency of an enterprise through appropriate allocation of resources. The methodology used in the an...
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| Format: | Article |
| Language: | English |
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MDPI AG
2023-03-01
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| Series: | Energies |
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| Online Access: | https://www.mdpi.com/1996-1073/16/5/2477 |
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| author | Łukasz Kuźmiński Zdzisław Kes Veselin Draskovic Andrzej Gawlik Marcin Rabe Katarzyna Widera Agnieszka Łopatka Maciej Śniegowski |
| author_facet | Łukasz Kuźmiński Zdzisław Kes Veselin Draskovic Andrzej Gawlik Marcin Rabe Katarzyna Widera Agnieszka Łopatka Maciej Śniegowski |
| author_sort | Łukasz Kuźmiński |
| collection | DOAJ |
| description | Budgets in organisational units are considered to be traditional management support tools. On the other hand, budgetary control is the essence of control measures, allowing for the increase in the efficiency of an enterprise through appropriate allocation of resources. The methodology used in the analysis of budget variances (obtained as a result of applying budgetary control) undoubtedly influences the management efficiency of almost every organizational unit. The authors indicate a research gap of methodological and application nature in the area of risk measurement in the analysis of budget variances. Therefore, the aim of the article is to create universal and flexible models enabling probabilistic quantification of the risk of budget variance regardless of the nature of the cost, the person budgeting and the budgeting unit. Extreme value theory was used to develop the model. The results of the work are models allowing for the estimation of the limit level of deviation for assumed probabilities and models determining the level of deviation for a given probability level. The application of these models in budgetary control will allow for a synthetic assessment of the degree of budget execution in the company, comparing the quality of budget execution over time as well as between units, defining the limits of materiality of budget variances. For the purpose of model verification, the authors have used budget variances of cost energy consumption, which have been determined on the basis of empirical distributions obtained from data coming from the system of budgetary control implemented at a university located in a larger European city. |
| first_indexed | 2024-03-11T07:26:04Z |
| format | Article |
| id | doaj.art-fc15bb3fcbbd4c4383dcfe5d2a1626fd |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-11T07:26:04Z |
| publishDate | 2023-03-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-fc15bb3fcbbd4c4383dcfe5d2a1626fd2023-11-17T07:39:09ZengMDPI AGEnergies1996-10732023-03-01165247710.3390/en16052477Modelling of the Risk of Budget Variances of Cost Energy Consumption Using Probabilistic QuantificationŁukasz Kuźmiński0Zdzisław Kes1Veselin Draskovic2Andrzej Gawlik3Marcin Rabe4Katarzyna Widera5Agnieszka Łopatka6Maciej Śniegowski7Department of Process Management, Wroclaw University of Economics and Business, 53-345 Wrocław, PolandDepartment of Process Management, Wroclaw University of Economics and Business, 53-345 Wrocław, PolandFaculty of Management, University of Social Sciences, 90-229 Lodz, PolandFaculty of Environmental Management and Agriculture, West Pomeranian University of Technology in Szczecin, 71-494 Szczecin, PolandManagement Institute, University of Szczecin, 70-453 Szczecin, PolandFaculty of Economics and Management, Opole University of Technology, 45-758 Opole, PolandInstitute of Economics and Finance, University of Szczecin, 70-453 Szczecin, PolandDoctoral School, University of Szczecin, 70-453 Szczecin, PolandBudgets in organisational units are considered to be traditional management support tools. On the other hand, budgetary control is the essence of control measures, allowing for the increase in the efficiency of an enterprise through appropriate allocation of resources. The methodology used in the analysis of budget variances (obtained as a result of applying budgetary control) undoubtedly influences the management efficiency of almost every organizational unit. The authors indicate a research gap of methodological and application nature in the area of risk measurement in the analysis of budget variances. Therefore, the aim of the article is to create universal and flexible models enabling probabilistic quantification of the risk of budget variance regardless of the nature of the cost, the person budgeting and the budgeting unit. Extreme value theory was used to develop the model. The results of the work are models allowing for the estimation of the limit level of deviation for assumed probabilities and models determining the level of deviation for a given probability level. The application of these models in budgetary control will allow for a synthetic assessment of the degree of budget execution in the company, comparing the quality of budget execution over time as well as between units, defining the limits of materiality of budget variances. For the purpose of model verification, the authors have used budget variances of cost energy consumption, which have been determined on the basis of empirical distributions obtained from data coming from the system of budgetary control implemented at a university located in a larger European city.https://www.mdpi.com/1996-1073/16/5/2477extreme value theorybudgetary controlmethods of budget variance analysisbudget variances cost energy consumption |
| spellingShingle | Łukasz Kuźmiński Zdzisław Kes Veselin Draskovic Andrzej Gawlik Marcin Rabe Katarzyna Widera Agnieszka Łopatka Maciej Śniegowski Modelling of the Risk of Budget Variances of Cost Energy Consumption Using Probabilistic Quantification Energies extreme value theory budgetary control methods of budget variance analysis budget variances cost energy consumption |
| title | Modelling of the Risk of Budget Variances of Cost Energy Consumption Using Probabilistic Quantification |
| title_full | Modelling of the Risk of Budget Variances of Cost Energy Consumption Using Probabilistic Quantification |
| title_fullStr | Modelling of the Risk of Budget Variances of Cost Energy Consumption Using Probabilistic Quantification |
| title_full_unstemmed | Modelling of the Risk of Budget Variances of Cost Energy Consumption Using Probabilistic Quantification |
| title_short | Modelling of the Risk of Budget Variances of Cost Energy Consumption Using Probabilistic Quantification |
| title_sort | modelling of the risk of budget variances of cost energy consumption using probabilistic quantification |
| topic | extreme value theory budgetary control methods of budget variance analysis budget variances cost energy consumption |
| url | https://www.mdpi.com/1996-1073/16/5/2477 |
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