=+17-21 K Inventory management and the balanced scorecard OBJECTIVE 4 Rexburg Racers (RR) has implemented a balanced scorecard to measure and support its just-in-time (JIT) production system. In the learning and growth category, RR measures the percentage of employees who are cross-trained to perform a wide variety of production tasks. Internal-business-process measures are inventory turns and on-time delivery. The customer perspective is measured using a customer satisfaction measure, and financial performance using operating profit. RR estimates that, if it can increase the percentage of cross-trained employees by 11%, the resulting increase in labour productivity will reduce inventory-related costs by

$95000 per year and shorten delivery times by 10%. The 10% reduction in delivery times, in turn, is expected to increase customer satisfaction by 6%, and each 1% increase in customer satisfaction is expected to increase revenues by 2.2% (non-compounded) due to higher prices.

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