Resource Consumption Models: Difference between revisions
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(Created page with "Kaplan says they are Resource Consumption models Cost of resources supplied = cost of resources used + unused capacity E.g. capacity to process 15,000 at a cost of $300,000 o...") |
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Kaplan says they are Resource Consumption models | [[author::Kaplan]] says they are Resource Consumption models | ||
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So if managers decide to reduce a product line that will automatically increase the unused capacity. Mgrs should try and reduce this cost. | So if managers decide to reduce a product line that will automatically increase the unused capacity. Mgrs should try and reduce this cost. | ||
If more PO’s are processed (people working harder and longer) eventually more spending will be required to get back to equilibrium | If more PO’s are processed (people working harder and longer) eventually more spending will be required to get back to equilibrium | ||
See also [[ABC]] | |||
[[category:Pages Needing Improvement]] | |||
[[Category:Strategy]] | [[Category:Strategy]] | ||
Latest revision as of 08:03, 13 October 2012
Kaplan says they are Resource Consumption models
Cost of resources supplied = cost of resources used + unused capacity E.g. capacity to process 15,000 at a cost of $300,000 or $20/PO. If 13,000 orders are processed $40,000 of unused capacity. If this cost is fixed then it’s a committed resource. If it can be continually adjusted like casual labor then it’s a Flexible resource (V.C)
So if managers decide to reduce a product line that will automatically increase the unused capacity. Mgrs should try and reduce this cost. If more PO’s are processed (people working harder and longer) eventually more spending will be required to get back to equilibrium
See also ABC
