BU247 Chapter Notes -Balanced Scorecard, Accounts Receivable, Customer Satisfaction

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13 Apr 2014
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Companies, in addition to costs of production, also incur marketing, selling, distribution, and. Chapter 6 measuring and managing customer relationships administrative (msda) expenses. Most of these expenses are independent of the volume and mix of products that the company produces, so that they cannot be traced through causal relationships to products. Many of these expenses are incurred through multiple distribution channels. Customers and channels differ considerably in their use of msda resources. Companies must understand the cost of selling through various channels to diverse segments . Extend abc to trace msda expenses directly to customer orders and to individual customers. To balance the pressure to meet/exceed customer expectations, companies must measure the cost to serve each customer and the profits earned. Ability to accurately calculate metrics (like % unprofitable customers) = important for abc in bsc. Example of madison dairy measuring customer profitability. Madison dairy has annual revenues of 3 million, and its msda expenses are 900k (30% of revenues).

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