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Frameworks for Developing Performance Measures
There are a number of approaches which will be described here in broad terms:
At first glance, you may be thinking, why are there so many approaches and methodologies? Isn't there a best approach? The answer is no, there isn't one single best approach, at least not yet.
Each approach provides its own unique perspective. Each approach is valid and in its own way provides management with a lens with which to examine a particular situation.
ABC distributors has an annual demand for an airport metal detector of 1,400 units. The cost of a typical detector to ABC is $400. Carrying cost is estimated to be 20% of the unit
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