BUS 322 Lecture Notes - Lecture 2: Cross-Functional Team, Cost Driver, Loss Leader

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 322
• Professor: Mahmoudian Fereshteh

Document Summary

Customer profitability analysis: activities, cost, profit serving customers. Measure customer profitability + effective/ineffective customer-related activities retain unprofitable customers (80%): customer prestige, future profitability, loss leader to enter market, knowledge/expertise. Target costing target sp - target cost = target profit. Abc: identify, classify activities related to produxcts/services => estimate cost + calculate cost- driver rate => assign costs using cost-driver rate. Identify value-added (enhance value + meet org goal + customer encourage)/non-value-added (no value => defective goods, build up inventory, time and effort moving, waiting time, transporting workers) Identify process opportunities: enhance value-added + reduce/eliminate non-value-added (competitors create value at low cost, competition appear quick, org apply freed-up recourse to value added activities/distribute to owners and employees) => ask why in each step (trim excess plastic): appearance + function, high injection pressure: plastic leaks from edges, high pressure require mold properly, design permit leakage, mold based on old design. => rework/replace old mold with improve mold to eliminate trimming need.