dalanced scorecard. (R. Kaplan, adapted) Petrocal, Inc., refines gasoline and sells it through its own Petrocal gas stations. On the basis of market research, Petrocal determines that 60% of the overall gaso- line market consists of "service-oriented customers," medium- to high-income individuals who are willing to pay a higher price for gas if the gas stations can provide excellent customer service, such as a clean facility, a convenience store, friendly employees, a quick turnaround, the ability to pay by credit card, and high-octane premium gasoline. The remaining 40% of the overall market are "price shoppers" who look to buy the cheap- est gasoline available. Petrocal's strategy is to focus on the 60% of service-oriented customers. Petrocal's balanced scorecard for 2017 follows. For brevity, the initiatives taken under each objective are omitted. Actual Target Performance Performance Objectives Measures Financial Perspective Increase shareholder value Operating-income changes from príce recovery $80,000,000 $85,000,000 Operating-income changes from growth $60,000,000 $62,000,000 Customer Perspective Increase market share Market share of overall gasoline market 4% 3.8% Internal-Business-Process Perspective Quality index Refinery-reliability index (%) 92 points 93 points Improve gasoline quality Improve refinery performance 91% 91% Ensure gasoline availability Learning-and-Growth Perspective Increase refinery process capability Product-availability index (%) 99% 99.5% Percentage of refinery processes with advanced controls 94% 95%
dalanced scorecard. (R. Kaplan, adapted) Petrocal, Inc., refines gasoline and sells it through its own Petrocal gas stations. On the basis of market research, Petrocal determines that 60% of the overall gaso- line market consists of "service-oriented customers," medium- to high-income individuals who are willing to pay a higher price for gas if the gas stations can provide excellent customer service, such as a clean facility, a convenience store, friendly employees, a quick turnaround, the ability to pay by credit card, and high-octane premium gasoline. The remaining 40% of the overall market are "price shoppers" who look to buy the cheap- est gasoline available. Petrocal's strategy is to focus on the 60% of service-oriented customers. Petrocal's balanced scorecard for 2017 follows. For brevity, the initiatives taken under each objective are omitted. Actual Target Performance Performance Objectives Measures Financial Perspective Increase shareholder value Operating-income changes from príce recovery $80,000,000 $85,000,000 Operating-income changes from growth $60,000,000 $62,000,000 Customer Perspective Increase market share Market share of overall gasoline market 4% 3.8% Internal-Business-Process Perspective Quality index Refinery-reliability index (%) 92 points 93 points Improve gasoline quality Improve refinery performance 91% 91% Ensure gasoline availability Learning-and-Growth Perspective Increase refinery process capability Product-availability index (%) 99% 99.5% Percentage of refinery processes with advanced controls 94% 95%
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter9: Cost Accounting For Service Businesses, The Balanced Scorecard, And Quality Costs
Section: Chapter Questions
Problem 11E: Luxe Inc., a chain of gasoline service stations, has a strategy of charging premium prices for its...
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Q.Would you have included some measure of employee satisfaction and employee training in the l earning-and-growth perspective? Are these objectives critical to Petrocal for implementing its strategy? Why or why not? Explain briefly
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