The vice president of sales learns that two of the department largest customers lose 50% of profits, and that the most lucrative 1% of the department's customers generate 100% of gains. The division has just completed a project to install a time-driven activity-based cost system that traces costs to the processes used to produce, sell and deliver a broad variety of stainless steel sinks to a different customer base. Given the department's high assortment of products and customers (which comprises wholesalers, retailers, contractors, and providers), the VP of sales wanted a considerably more exact price system so that he could conduct hard but fact-based discussions with customers.
The case illustrate the layout and execution of gain measurement system and the new cost. It records acceptance and choices made by managers after seeing the tremendous dispersion of gains among their products and customers.
PUBLICATION DATE: September 25, 2009 PRODUCT #: 114S06-PDF-SPA
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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