Why might a firm want to abandon a customer? What are some of the signs that a firm would be better off "firing" a customer?
What will be an ideal response?
A firm might choose to abandon, or fire, a customer if servicing the customer actually costs more than the firm earns through the customers' purchases. Warning signs that a customer is unprofitable include the following: they make unreasonable demands, they want everything for nothing, they are slow to pay, they don't listen to communications from the firm, they don't respond to communications from the firm, or they show a lack of basic respect in their interactions with the firm.
You might also like to view...
All of the following are indicators of financial statement fraud EXCEPT:
a. Companies with unrealistically large growth in assets, revenues or profits. b. Companies with a principal who has been involved in a bankruptcy. c. Companies whose success depends on a special tax loophole or tax avoidance scheme. d. Companies that report contingent liabilities that have the potential to create a loss.
The economic value of a tangible asset may decline below its book value but an impairment loss would not be recognized when the
a. undiscounted future cash flows exceed its book value. b. undiscounted future cash flows exceed its market value. c. discounted future cash flows exceed its book value. d. discounted future cash flows exceed its market value. e. discounted future cash flows exceed its liquidation value.
Tremble Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: Variable costs per unit: Direct materials$94Fixed costs per year: Direct labor$539,000Fixed manufacturing overhead$3,675,000Fixed selling and administrative expenses$1,350,000 The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 49,000 units and sold 45,000 units. The company's only product is sold for $233 per unit.The unit product cost under super-variable costing is:
A. $210 per unit B. $94 per unit C. $105 per unit D. $180 per unit
Which of the following strategies seeks to target and effectively serve a single segment of the market?
A. Niche competitive advantage B. Sustainable competitive advantage C. Product/service differentiation D. Cost competitive advantage