A vice president of operations wants to evaluate the impact of reducing manufacturing expenses on the firm's return on assets.A measurement approach that he might consider for this is the:
A)Strategic profit model.
B)Balanced scorecard model.
C)SCOR model.
D)None of these.

Question

Quizplus · Accepted Answer

The Strategic Profit Model (SPM) is a financial tool used to evaluate the impact of changes in operational efficiencies on the firm's financial performance, such as return on assets. It analyzes the relationships between revenue, profit margin, asset turnover, and financial leverage to determine how changes in any of these variables affect the overall return on assets. Therefore, it is the most appropriate measurement approach for the vice president of operations to consider in evaluating the impact of reducing manufacturing expenses on the firm's return on assets. The Balanced Scorecard and SCOR models are not specifically designed for this purpose.

A Vice President of Operations Wants to Evaluate the Impact