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Fitzgerald Model - Performance Measures
The Fitzgerald model is a performance measurement system specifically for service industry. Fitzgerald (1991) describes a feedback/feed forward model in which performance measurement is part of the feedback/feed forward control mechanism to stimulate action and organisational learning. Fitzgerald acknowledges that many service organisations are diversified and face problems of geographical dispersion. He suggests the formation of strategic business units (SBU). An SBU is defined as
... an operating unit which sells a distinct set of products or services to an identifiable group of customers in competition with a defined set of organisations.
Each unit has its own performance measures (see figure).
A vendor's gives discounts to entice larger quantity purchases. The price breaks are as follows: Order Size Discount Unit Price 0 - 40 0% $30 50
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