CUSTOMER PROFITABILITY ANALYSIS: CHALLENGES AND NEW DIRECTIONS Summary This article presents the concept of modifying cost accounting system in order to provide measurements from a customer profitability viewpoint. Most management accounting systems focus on products‚ departments or geographical areas‚ which have little to do with customers. A questionnaire was sent to marketing managers and marketing controllers and interviews with respondents. Much of this article draws on qualitative responses
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Notes on labor productivity Labor productivity is a key element in the explanation of how the economy works. It is especially important with regard to wages. What follows is some material about labor productivity and investment spending that is a reorganization of what is presented in your textbook. Its focus is on the connection between labor productivity and wages. Labor productivity is the value of the product or service you can produce in an hour‚ day‚ week or other unit of time. The value
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influences productivity. Mozart in the morning does not necessarily mean that five extra tonnes of ore will be produced per employee per shift. When we speak of the culture of an organization‚ we refer to the behaviour patterns and standards that bind it together. Some organizational cultures encourage productivity; many do not. Culture should not be confused with climate. Climate is the short-term mood of an organization. Unlike culture‚ it is fragile and subject to change. How Beliefs Affect
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Productivity in Research A production system involves constant and numerous decisions that greatly impact its performance. The company must need to develop certain methods to help engineers to make the best choices when designing or using production systems. Such systems range from simple machine on a production line to a complete logistic platform with many interacting industrial partners. It entails that optimization is playing a key role for specific elements of these systems. A company must
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QUALITATIVE SERVICE PRODUCTIVITY Methodology for the Analysis and Optimization of Service Productivity considering qualitative Factors © Fraunhofer QUALITATIVE SERVICE PRODUCTIVITY Objectives and Methodology Qualitative Factors in Service Productivity Methodology for the Analysis and Optimization of Qualitative Service Productivity Key Performance Indicators for Qualitative Service Productivity Measurement Example Conclusion and Next Steps © Fraunhofer Objectives
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CUSTOMER PROFITABILITY ANALYSIS Customer profitability analysis (CPA) can be defined as a method used to compare the costs of all the activities used to support a customer or a customer group with the revenue generated by that customer or customer group. It is the analysis of the revenue and costs that relates to the customers which can be determined by considering the similarities and differences in customers’ buying behaviours and customer preferences. From the definition‚ it shows three features
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Topic Gateway Series Customer profitability analysis Customer profitability analysis Topic Gateway Series No. 55 1 Prepared by Jasmin Harvey and Technical Information Service January 2009 Topic Gateway Series Customer profitability analysis About Topic Gateways Topic Gateways are intended as a refresher or introduction to topics of interest to CIMA members. They include a basic definition‚ a brief overview and a fuller explanation of practical application. Finally they
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in determining the cost of serving customers and as a basis for evaluating the profitabilty of a specific customer or group of customers. Why is this important? Most managers agree that 80% of their profits come from the top 20% of their customers and most important‚ the bottom 20% of their customers are unprofitable. For example‚ to compete with Walmart‚Best Buy works hard to attract profitable customers and equally hard to discourage the unprofitable customers which those that are price shopping
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A customer profitability analysis is an evaluation process that focuses on assigning costs and revenues to segments of the customer base‚ instead of assigning revenues and costs to the actual products‚ or the units or departments that compose the corporate structure of the producer. Approaching profitability from this angle can sometimes provide valuable insights into how each step of the process of designing‚ manufacturing‚ and ultimately selling a good or service incurs cost and generates revenue
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Affecting Profitability: An Empirical Study on Ethiopian Banking Industry Amdemikael Abera A Thesis Submitted to The Department of Accounting and Finance Presented in Partial Fulfillment of the Requirements for the Degree of Master of Science (Accounting and Finance) Addis Ababa University Addis Ababa‚ Ethiopia June 2012 Addis Ababa University School of Graduate Studies This is to certify that the thesis prepared by Amdemikael Abera‚ entitled: Factors Affecting Profitability: an Empirical
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