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Case
-
Reference no. 9-190-002
Prize winner
Authors:
Published by:
Harvard Business Publishing (1989)
Version:
27 April 2001
Length:
13 pages
Data source:
Field research

Abstract

Multinational company needs an improved cost system to determine the profitability of individual customer orders. Its strategy is to have significant sales and profitability growth without adding additional administrative and support people. The new cost system assesses a charge to each customer order received and an additional surcharge if the item ordered is not normally stocked. The goal is to direct sales resources to the most profitable customers: those who buy standard products in large predictable quantities with minimal demands on technical resources.

Topics

Financial management; Management; Management accounting; Cost accounting; Cost allocation; Cost systems; Customer Relationship Management (CRM); Sales strategy
Location:
Size:
USD160 million sales
Other setting(s):
1987

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