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Elroy Racers makes bicycles. It has always purchased its bicycle tires from the M. Wilson Tires at $25 each but is currently considering making the
Elroy Racers makes bicycles. It has always purchased its bicycle tires from the M. Wilson Tires at $25 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows: The company's fixed expenses would increase by $60,000 per year if managers decided to make the tire. (b) What qualitative factors should Elroy Racers consider in making this decision? In a recent annual report, Lexmark, a developer, manufacturer, and supplier of printing and imaging solutions for offices and homes, made the following statement: "One of the most important metrics for Lexmark is our hardware revenue growth because sales of hardware drive our future sales of supplies, which is the profit engine for Lexmark." Would Lexmark's hardware growth be considered a leading or a lagging indicator? Why? First State Bank offers a wide range of banking services, including checking accounts, certificates of deposit, loans, credit cards, and safety deposit boxes. Bank managers know that customer satisfaction has a direct impact on the bank's ability to retain customers and to persuade them to add accounts. Think of your experiences with your bank. What specific measures might bank managers monitor to gauge customer satisfaction and to link customer retention with account growth? LowFare is a no-frills airline that provides daily shuttle service in the northeast United States. Passengers are predominantly businesspeople who travel between New York and Boston for the day. Identify one measure in each of the four perspectives of the balanced scorecard that LowFare managers should monitor. Explain your reasoning for each
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