Quiz: Business Analysis Tools

Can all costs be reasonably assigned (partially or entirely) to a product or service? For example, it could be nonsensical to assign costs of a staff's leadership training to a particular product or service, in which case, the answer would be no.

Reallocation of funding between teams/units/projects could be beneficial.Example: The government wants to minimize costs in its vehicle fleet. The costs of a 2015 and 2010 sedan are $20000 and $10000 respectively. The yearly price of gas for the 2015 sedan is $1200 and the 2010 sedan is $2000. For simplicity of the example, assume the car is anticipated to be in the fleet for one year, insurance rates are the same for each vehicle and resale value is ignored. The government can then choose the new vehicle that will potentially add value to the employees that utilize it, or choose the older vehicle that will save $20000 - $10000 + $1200 - $2000 = $9200.

Numeration of activity value is possible by judging by factor scales (such as level of importance to MTO, engagement, message, etc.). A numerical value system exists or can be devised and used to evaluate these individual units/teams/projects.

Financial insight on how successful each product or service offered is would be beneficial (e.g. Input/output ratio). This insight includes the true cost per unit of products or services that is inclusive of all costs such as employee compensation, factory costs, etc.

Is the process data driven (as opposed to driven by creativity)?

Is the process done the same way each time?

Is a goal of the analysis to improve process speed and efficiency?

Is numerical data regarding the process available or obtainable?

I know or can obtain the desired profit margin and I am interested in the simplest method to decide/evaluate the pricing for a product or service.

Products are made based on customer specification and the main objective of analysis is to make profit after considering fixed costs.

I am interested in quick answers to hypothetical scenarios and minimizing financial risk.

Graphs to assist understanding the result