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More in Zero-Based Budgeting
What is a decision package in ZBB? How are decision packages ranked in ZBB? Where is ZBB most and least appropriate? What behavioral and organizational challenges does ZBB face? What resources and effort does ZBB require to implement well? How are decision packages linked to organizational objectives when ranking? How does ZBB support cost transparency and accountability? How does ZBB handle activities that are legally required or essential? How long does ZBB typically take compared with incremental budgeting? How does ZBB affect employee behavior and morale?
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Budgeting & Forecasting › Zero-Based Budgeting

What are mutually exclusive and incremental decision packages?

Intermediate

Answer

Mutually exclusive packages present alternative ways of performing an activity (choose one). Incremental packages present successive levels of service/effort for an activity (a base level plus add-ons), each justified separately, so management can fund up to the level the budget allows. Both help prioritize how much to spend on an activity.
Real-world example The helpdesk offers a base package plus incremental packages for extended hours, funded as budget allows.

Common follow-ups: What is an incremental package? | What is a mutually exclusive package?

The Budgeting Process Zero-Based Budgeting Zero-Based Budgeting
All 34 Zero-Based Budgeting questions