Ron Benson is a new production manager. After a great deal of
effort, including considerable market research, he completes his
budget and submits it to his boss, Diane Moran. Without even
looking at it, she asks him what his “fudge factor” was, and which
items contained the most slack. Ron, very surprised, responds that
he doesn’t use any “fudge factor,” and that all his figures are
honest. Ms. Moran counters by asking him how he would respond if he
had to cut about 20% from his budget, as it is. She tells him that
most budgets are trimmed in committee, and he had better be ready.
She returns the budget to him, and tells him to come back with
something reasonable.

Should Ms. Moran refuse to accept a budget without slack? Should
building in slack be an accepted budgeting practice? Explain.