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what are some other performance measurement techniques commonly used in business?

what are some other performance measurement techniques commonly used in business?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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what are some other performance measurement techniques commonly used in business?

Expert Solution
Performance measurement

The Measurement of the overall functions related to business as a whole to evaluate present and plan for future -Performance measurement

These are few objectives to consider 

  • The mission statement - Purpose ,values ,policies and culture
  • Planning levels - Strategic, Tactical, operational 
  • External and internal factors affecting performance - Economic, government
  • Critical success factors - Quality of service, competitiveness
  • Financial performance measures - Inflow( revenue) , Outflow( costs) 

Performance measurement techniques

  1. Benchmarking
  2. Financial 
  3. Non-Financial
  4. Balanced score card
Performance measurement techniques 1 and 2

In brief about the above

  1. Benchmarking -Technique for continuous improvement by what is it and how is it their business performing in the market an what competitors do in the industry

Types of benchmarking                                    

  • Internal
  • Competitive
  • Functional
  • Strategic

Benchmarking process

  • Planning 
  • Analysis
  • Action
  • Review

2. Financial performance measures To monitor the inflow of revenue and outflow of costs which is analysing the overall money in the business

  • Measuring profitability - ROCE , ROS , Gross margin
  • Measuring activity - Assets, Inventory, pays
  • Measuring risk - Capital gears , Interest cover
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