Modelling Performance Options
The previous two chapters have discussed margin management and asset management in detail. This chapter brings them together using the strategic profit model (SPM) as the co-ordinating medium. It will be recalled that the SPM uses both margin management and asset management to explore performance options and has the facility to identify tradeoff options between the two in an attempt to optimise the return on assets. We are using an expanded version of the model to identify the operational and strategic aspects of the decisions. In Figure 6.1 the facilitating/determining factors appear as activities requiring decisions; those decisions relating financial management issues are also included. One other item to be included are customer expectations which is an important input into the decisions to allocate resources. The SPM is used to optimise both customer satisfaction and corporate performance.
KeywordsExpense Allo Alloca
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