You are an account manager at Owens & Minor. You have two customers on a stockless program, Alpha Hospital and Beta Hospital. Given below are the O&M activity rates from their recent ABC implementation (Table 1) and each customers actual activity levels (Table 2). Using the information for Alpha Hospital Customer Profitability Statement (Exhibit 4 in Owens and Minor A Case), draft a customer profitability statement for Beta Hospital using the format shown in Exhibit 4.

Q2 - O&Ms strategy was to give customers the option of staying with the old, cost-plus pricing system or adopting the new, ABP system. Which customer, Alpha or Beta, do you think will adopt ABP first? Explain

\begin{tabular}{|l|c|c|} \hline Table 2 - Actual Activity Level & & \\ \hline & & \\ \hline Monthly Sales & Alpha Hospital & Beta Hospital \\ \hline Activity Levels: & 150000 & 150000 \\ \hline orderimonth & & \\ \hline linestmonth & 750 & 333 \\ \hline deliveriestmonth & 15000 & 10000 \\ \hline% EDl orders & 12 & 10 \\ \hline account receivable & 25% & 95% \\ \hline emergency orderstmonth & $300,000.00 & $75,000.00 \\ \hline cost-plus \% & 20 & 10 \\ \hline \end{tabular} \begin{tabular}{|l|c|c|} \hline Table 2 - Actual Activity Level & & \\ \hline & & \\ \hline Monthly Sales & Alpha Hospital & Beta Hospital \\ \hline Activity Levels: & 150000 & 150000 \\ \hline orderimonth & & \\ \hline linestmonth & 750 & 333 \\ \hline deliveriestmonth & 15000 & 10000 \\ \hline% EDl orders & 12 & 10 \\ \hline account receivable & 25% & 95% \\ \hline emergency orderstmonth & $300,000.00 & $75,000.00 \\ \hline cost-plus \% & 20 & 10 \\ \hline \end{tabular}