The Gains from Reengineering Will Be Greatest When the Process

question 70

Short Answer

The gains from reengineering will be greatest when the process is ________ and cuts across a number of jobs and departments.

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Definitions:

Operating Leverage

A measure of how revenue growth translates into growth in operating income, highlighting the proportion of fixed costs in a company's cost structure.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, used to cover fixed costs and generate profit.

Fixed Costs

Expenses that do not change with the level of output or sales in the short term, such as rent, salaries, and insurance.

Contribution Margin Ratio

A financial metric that measures the proportion of revenue that exceeds variable costs, indicating how much of sales revenue is available to cover fixed costs and generate profit.