Abstract: Strengthening core competitiveness is the main goal of enterprises in a fierce competitive environment. Accurate cost information is a great help for managers in dealing with operation strategies. This paper establishes a profitability management mechanism that applies the Activity-Based Benefit approach (ABBA) to solve the profitability for each customer from the market. ABBA provides financial and non-financial information for the operation, but also indicates what resources have expired in the operational process. The customer profit management model shows the level of profitability of each customer for the company. The empirical data were gathered from a case company operating in the leather industry in Taiwan. The research findings indicate that 30% of customers create little profit for the company as a result of asking for over 5% of sales discounts. Those customers ask for sales discount because of color differences of leather products. This paper provides a customer’s profitability evaluation mechanism to help enterprises to greatly improve operating effectiveness and promote operational activity efficiency and overall operation profitability.
Abstract: In today’s business environment, companies should
make strategic decisions to gain sustainable competitive advantage.
Order selection is a crucial issue among these decisions especially for
steel production industry. When the companies allocate a high
proportion of their design and production capacities to their ongoing
projects, determining which customer order should be chosen among
the potential orders without exceeding the remaining capacity is the
major critical problem. In this study, it is aimed to identify and
prioritize the evaluation factors for the customer order selection
problem. Conjoint Analysis is used to examine the importance level
of each factor which is determined as the potential profit rate per unit
of time, the compatibility of potential order with available capacity,
the level of potential future order with higher profit, customer credit
of future business opportunity, and the negotiability level of
production schedule for the order.