Case Study: Profitability Analysis at Best Potato Chips, Inc.
Steve Brown, director of manufacturing, disagreed. He felt the additional manufacturing cost required to meet Value Savings Stores’ requirements was too high:
We should let Value Savings Stores know what we really think about their special requirements. Stickers, of all things! What business do they think we are in?
The sales force had a different opinion. Jake Williams felt the grocery segment was most important:
Just look at that volume! How could they be anything but our best customers?
The broad interest being generated by this assignment worried Aaron. Would he have to justify his recommendations to everyone in the company? Aaron quietly closed his office door.
Based on the available information and his own knowledge of ABC systems, Aaron needed to complete a segment profitability analysis before his meeting with Joe in the morning. With all these interruptions, it was going to be a long night.
