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Benchmarking and Management Accounting

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• Hiram Phillips could have used benchmarking to assist in his cost reduction efforts by following the five stages of benchmarking. Initially, an internal study and preliminary competitive analysis should have been conducted to determine how it currently performs on its dimensions. Some of these activities are labor cost, delivery of shipments, customer service time spent on the phone, and cost of commissions on sales to employees. Using the company internal data and preliminary external competitive analysis, using industry comparisons of quality from reliable consumer reports, would determine the scope and significance of the study for each area.

• In the second stage, a benchmarking team should have been developed of committed …show more content…

While another team in the customer service call center is responsible for dealing with trade and retail customer’s complaints and questions. Continuous education and training programs should be implemented to train the customer service call center representatives, on how to efficiently take orders, handle questions and complaints while maintaining quality customer service. Through gathering of information from benchmarking partners, the customer service call center should have an average time spent on the phone with customers. Representatives that constantly provide quality customer service and do better than the average time spent on the phone should be acknowledged and rewarded with an incentive that will create competition among the reps to perform better continuously.

• Appraisal Cost:

 An example of an appraisal cost in Hiram’s business would be the delivery of shipments because as stated in the article, “no reliable metric had been in place to track it,” and according to Billy Benton, an order that was supposed to be shipped was never shipped, all along it was sitting on a railroad siding across from the plant, referring to Rainbarrel’s shipping process. In order to monitor the shipping process, an appraisal cost would have to be incurred because it relates to inspecting products to make sure they meet both internal and external customers’ requirements. Tracking of the shipment is tracked through tracking numbers

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