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The best measures that should be captured and reported to managers relate to corporate strategy and are SMART: specific, measurable, actionable, relevant, and timely. Below are examples of poorly constructed performance measures for each of these. For each component of SMART, provide two better measures than those provided. SMART Process Measured Poor Measure Better measures Specific Production Number of defects #1 #2 + Measurable Inventory Errors made #1 #2 Actionable Division A Profit margin #1

The best measures that should be captured and reported to managers relate to corporate strategy and are SMART: specific, measurable, actionable, relevant, and timely. Below are examples of poorly constructed performance measures for each of these. For each component of SMART, provide two better measures than those provided. SMART Process Measured Poor Measure Better measures Specific Production Number of defects #1 #2 + Measurable Inventory Errors made #1 #2 Actionable Division A Profit margin #1

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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The best measures that should be captured and reported to managers relate to corporate strategy and are SMART: specific, measurable, actionable, relevant, and timely. Below are examples of poorly constructed performance measures for each of these. For each component of SMART, provide two better measures than those provided. SMART Process Measured Poor Measure Better measures Specific Production Number of defects #1 #2 Measurable Inventory Errors made #1 #2 Actionable Division A Profit margin #1 Relevant Sales Earnings per share Timely Production Last year's defect rate #2 #1 #2 #1 #2
Transcribed Image Text:The best measures that should be captured and reported to managers relate to corporate strategy and are SMART: specific, measurable, actionable, relevant, and timely. Below are examples of poorly constructed performance measures for each of these. For each component of SMART, provide two better measures than those provided. SMART Process Measured Poor Measure Better measures Specific Production Number of defects #1 #2 Measurable Inventory Errors made #1 #2 Actionable Division A Profit margin #1 Relevant Sales Earnings per share Timely Production Last year's defect rate #2 #1 #2 #1 #2
The best measures that should be captured and reported to managers relate to corporate strategy and are SMART: specific, measurable, actionable, relevant, and timely. Below are examples of poorly constructed performance measures for each of these. For each component of SMART, provide two better measures than those provided. SMART Process Measured Poor Measure Better measures Specific Production Number of defects #1 Number of inventory items delivered to incorrect production area. Number of inventory items not recorded on receiving report. #2 Number of defects produced per machine. Segment margin for month. Measurable Inventory Errors made #1 Number of defects found in quality control process. Total sales dollars generated per salesperson. #2 Machine breakdown each day. Number of orders taken. Contribution margin for quarter. Defect rate each day. Actionable Division A Profit margin #1 #2 Relevant Sales Earnings per share #1 #2 Timely Production Last year's defect rate #1 #2 A
Transcribed Image Text:The best measures that should be captured and reported to managers relate to corporate strategy and are SMART: specific, measurable, actionable, relevant, and timely. Below are examples of poorly constructed performance measures for each of these. For each component of SMART, provide two better measures than those provided. SMART Process Measured Poor Measure Better measures Specific Production Number of defects #1 Number of inventory items delivered to incorrect production area. Number of inventory items not recorded on receiving report. #2 Number of defects produced per machine. Segment margin for month. Measurable Inventory Errors made #1 Number of defects found in quality control process. Total sales dollars generated per salesperson. #2 Machine breakdown each day. Number of orders taken. Contribution margin for quarter. Defect rate each day. Actionable Division A Profit margin #1 #2 Relevant Sales Earnings per share #1 #2 Timely Production Last year's defect rate #1 #2 A
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