KPI Portal

Opportunity costs

Opportunity costs measure what the firm forgoes when it chooses a specific action. The notion of opportunity costs is crucial in decision making.Variables: cost of capital, avg net valueCalculation: Cost of capital * average net valueMeasured as: Value ($/€), Interpretation of results: Lower is better

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Residual Income

Some firms use this KPI to overcome some of the incentive deficiencies of ROI, such as underinvesting. Residual income measures divisional performance by subtracting the opportunity cost of capital employed from division profits.Variables: Opportunity costs of capital employed, division profitsCalculation: Division profits - Opportunity costMeasured as: Value ($/€), Interpretation of ...

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Direct costs

Direct costs of a product or service are those items that are easily traced to the product or service. Direct labor and direct material costs are direct costs.Variables: Direct labor, direct materialCalculation: Sum of all direct labor and direct material costs.Measured as: Value ($/€), Interpretation of results: Lower is better

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Fixed costs

Costs that remain constant in total regardless of changes in activity within a relevant range. Costs that do not vary depending on production or sales levels, such as rent, property tax, insurance, or interest expense.Variables: Fixed costsCalculation: Sum of the fixed costsMeasured as: Value ($/€), Interpretation of results: Lower is ...

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Repeating calls complaints

Number of complaints in which the customer contacts more than once about the same complaint within a predefined time period. This measure is a quality indicator for complaint handling. Variables: Number of complaints, number of callsCalculation: Total Number of complaints / total number of callsMeasured as: Index, Absolute (#), Interpretation of ...

Posted in All sectors, Internal Process, KPI, Sales / Aftersales | No Comments »