Ethical Drugs Inc. (B):

Customer Profitability Analysis

Laurie Beancount decides further to use the ABC information to examine individual

customer profitability within each distribution market. She focuses first on the "Ma and

Pa Single-Store" distribution channel. Two customers are used to highlight the new

insights available with the ABC approach. Data pertaining to these two customers in

April are:

Total number of orders Average number of line items per order Total number of store deliveries Average number of cartons shipped per store delivery Average number of hours of shelf stacking per store delivery Average revenue per delivery Average cost of goods sold per delivery Charleston Pharmacy 12 10 24 $2,400 $2,100 Chapel Hill Pharmacy 10 18 10 20 0.5 $1,300 $1,650