The ABC Bank

1. Compute the profit (loss) per customer for the retail customer and business customer first using original cost system then using the ABC System.

2. Based on the case, do you think the original cost system is "broken"? Why? And if your answer is yes, how can it be improved?

3. How can ABC data be used to develop marketing strategies that increase profits? How can the branch manager use ABC data to identify opportunities to trim cost while maintaining or increasing customer satisfaction?

4. Do you think bank's incentive bonus plan to increase the number of customers is wise? What changes, if any, would you recommend?