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/ENGU45515219 por /content/13/Week-12%20Submission.pdf ENGG433/956-Spring-2019-Week-12 Submission Question 14.12 14.12 Customer profitability analysis; strategic considerations LO2 Cougar Toys is a toy wholesaler supplying to a range

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/ENGU45515219 " por /content/13/Week-12%20Submission.pdf ENGG433/956-Spring-2019-Week-12 Submission Question 14.12 14.12 Customer profitability analysis; strategic considerations LO2 Cougar Toys is a toy wholesaler supplying to a range of different customers. With concerns about sources of profitability from these different customers, Cougar has embarked on a relatively simple customer analysis exercise. In the first instance, customers have been classified as large, medium or small based essentially on sales volume. The results of this analysis are provided in the following table. 3 Sales revenue Cost of sales Gross profit Order filling costs Distribution-related costs Marketing/promotion/sales Administration-related costs Total expenses Profit (loss) Cost driver No. of orders received No. of deliveries made Sales in units by customer category Large Medium Small $2,500,000 $1,600,300 $1,400,900 1,500,000 880,165 770,495 1,000,000 720,135 630,405 to be assianed on the basis of number afarders Assigned on the basis of number of deliveries Assigned on sales dollars Assigned on number of deliveries Total $5,501,200 ,150,660 2,350,450 420 m 835,000 935,000 460,600 2,650,600 300,060 35 50 4 5 6 3 160 8 1 0 10 T 223 Required (a) Using the activity analysis data, calculate the profitability of each of the customer groups. (b) Management is concerned about the consolidation taking place in the industry. They know that going forward, customer relations and the strategic management of customers will be critical. Identify a number of the critical strategic factors that management might want to monitor in addition to the financial profitability analysis

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