SUPPLY CHAIN SERVICE STRATEGY

E d w a r d H . F r a z e l l e , P h . D .

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Figure 3.4 RightServe™ Customer Valuation Model

Customer Business Valuation We take the following factors into account when computing the business value of a customer: (1) Revenue, (2) Margin, (3) Profit, (4) Income, and (5) Return. Our table of customer business valuation factors follows. Revenue Margin Profit Income Return Revenue Margin Profit Net Income Return on Invested Capital Revenue Contribution Margin Contribution Profit Contribution Net Income Contribution Revenue Rank Margin Rank Profit Rank Net Income Rank Revenue per Unit Margin per Unit Profit per Unit Net Income per Unit Margin % of Revenue Profit % of Revenue Net Income % of Revenue Profit % of Margin Net Income % of Margin Net Income % of Profit Gross Margin Return on Inventory

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