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Nonfinancial performance measures Diamond Inc. is an Internet retailer of woodworking equipment. Customers order woodworking equipment from the company, using an online catalog. The company processes these orders and delivers the requested product from its warehouse. The company wants to provide customers with an excellent purchase experience in order to expand the business through favorable word-of-mouth advertising and to drive repeat business. To help monitor performance, the company developed a set of performance measures for its order placement and delivery process: Average computer response time to customer “clicks” Dollar amount of returned goods Elapsed time between customer order and product delivery Maintenance dollars divided by hardware investment Number of customer complaints divided by the number of orders Number of misfilled orders divided by the number of orders Number of orders per warehouse employee Number of page faults or errors due to software programming errors Number of software fixes per week Server (computer) downtime Training dollars per programmer a. For each performance measure, identify it as either an input or output measure related to the “order placement and delivery” process. b. Provide an explanation for each performance measure.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 23, Problem 23.24EX
Textbook Problem

Nonfinancial performance measures

 Diamond Inc. is an Internet retailer of woodworking equipment. Customers order woodworking equipment from the company, using an online catalog. The company processes these orders and delivers the requested product from its warehouse. The company wants to provide customers with an excellent purchase experience in order to expand the business through favorable word-of-mouth advertising and to drive repeat business. To help monitor performance, the company developed a set of performance measures for its order placement and delivery process:

 Average computer response time to customer “clicks”

 Dollar amount of returned goods

 Elapsed time between customer order and product delivery

 Maintenance dollars divided by hardware investment Number of customer complaints divided by the number of orders

 Number of misfilled orders divided by the number of orders

 Number of orders per warehouse employee

 Number of page faults or errors due to software programming errors

 Number of software fixes per week

 Server (computer) downtime

 Training dollars per programmer

 a.    For each performance measure, identify it as either an input or output measure related to the “order placement and delivery” process.

 b.    Provide an explanation for each performance measure.

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Chapter 23 Solutions

Accounting
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