Term
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Definition
| an integrates set of performance measures that are derived from and support the organizations strategy |
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Term
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Definition
| a fixed cost that supports more than one business segment, but is not traceable in whole or in part to any one of the business segments |
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Term
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Definition
| a business segment whose manager has control over cost but has no control over revenue or investments in operating assets |
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Term
| Decentralized Organization |
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Definition
| an organization in which decision making authority is not confined to a few top executives but rather is spread throughout the organization |
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Term
| Economic Value Added (EVA) |
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Definition
| a concept similar to residual income in which a variety of adjustments may be made to GAAP financial statements for performance evaluation purposes |
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Term
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Definition
| a business segment whose manager has control over cost, revenue and investments in operating assets |
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Term
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Definition
| Net operating income / sales |
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Term
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Definition
| income before interest and income taxes have been deducted |
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Term
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Definition
| cash, A/R, inventory, plant and equipment, and all other assets held for operating purposes |
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Term
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Definition
| a business segment whose manager has control over cost and revenue but has no control over investments in operating assets |
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Term
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Definition
| the Net Operating Income that an investment center earns above the minimum required return on its operating assets |
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Term
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Definition
| any business segment whose manager has control over costs, revenues or investments in operating assets |
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Term
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Definition
| Net operating income / average operating assets. It also equals margin multiplied by turnover |
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Term
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Definition
| any part or activity of an organization about which managers seek cost, revenue, and profit data |
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Term
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Definition
| a segment contribution margin less its traceable fixed costs. it represents the margin available after a segment covered all its own traceable costs. |
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Term
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Definition
| a fixed cost that is incurred because of the existence of a particular business segment and that would be eliminated if the segment were eliminated |
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Term
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Definition
| sales divided by average operating assets |
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Term
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Definition
| a cost that can be eliminated in whole or in part by choosing one alternative over another. (By choosing to go to the movie, the cost of the movie ticket is avoided) |
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Term
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Definition
| costs that have already been incurred and cannot be avoided |
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Term
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Definition
| same as an avoidable, incremental or incremental cost |
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Term
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Definition
| when a company involved in more than one activity in the entire value chain, some companies control all the activity |
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Term
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Definition
| A decision to carry out one of the activities in the value chain internally, rather than buy externally from a supplier |
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Term
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Definition
| a one-time order that is not considered part of the company's normal ongoing business |
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Term
| Relaxing (or elevating) the Constraint |
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Definition
| relieving the bottleneck and increase the capacity |
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