Top management Dakota, distributor of products for the office, is concerned first loss in the history of the company. Explores the role of activity-based costing and evaluation of customer profitability in the distribution company. Dakota customers are increasingly demanding more specialized services, such as desktop delivery. In addition, while some customers have moved to electronic ordering, others continue to place their orders manually. Prices are based on a fixed purchase price markup. Managers believe that a fixed mark-up may not be compensating them for the higher costs of manual order processing and delivery of the desktop. Financial Manager initiates efforts to estimate the costs of handling different types of orders, so that it can assess the profitability of individual customers based on their actual order. "Hide
by Robert S. Kaplan Source: HBS Premier Case Collection 5 pages. Publication Date: Aug 07, 2001. Prod. #: 102021-PDF-ENG
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