The applied policy is policy 2a because VCF Operations resolves multiple policy assignments by using active policy priority , not by custom group name, policy inheritance tree location, or alphabetical order. The exhibit shows policy 2a as active with priority 1 , policy 1a as active with priority 2 , and policy 2 as active with priority 3 . policy 1 is inactive, so it is not eligible to become the effective policy for the workload. VCF Operations documentation states that policies are applied in priority order as shown on the Active Policies tab, and that priority 1 is the highest priority. It further states that when an object is a member of multiple object groups and each group has a different policy assigned, VCF Operations associates the highest ranking policy with that object . Therefore, even though Workload-01 belongs to all four custom groups, the effective policy is the active policy with the highest rank: policy 2a . Reference topic: Objective 4.5 – Managing VCF Operations with VCF Policy / Policy Hierarchy / Policy Assignment / Active Policy Priority .