Explain the Process of Dealing with Loss Referred to as "Selective

question 8

Essay

Explain the process of dealing with loss referred to as "selective optimization with compensation." Provide a clear example of this process at work and specify which aspects of your example illustrate selection,optimization,and compensation.Give examples of questionnaire items that have been used to assess these processes.Page 570)

---

Definitions:

Contribution Margin Ratio

The portion of sales revenue that exceeds variable costs, expressed as a percentage.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, indicating how much contributes to covering fixed costs and generating profit.

Pretax Income

The income earned by a business before any taxes have been deducted.