Learn / Profitability, pricing, and costs Go to Overview 1. The revenue side: price, volume, and mix 2. The cost side: fixed, variable, and step costs, Pro 3. Contribution and operating leverage, Pro 4. Segment before you conclude, Pro 5. Building a profit bridge, Pro 6. Pricing cases: cost, competitors, and value, Pro 7. Cost reduction and operations levers, Pro Flashcards, 0 of 16 reviewed Basic quiz Advanced quiz Terms Profitability, pricing, and costs
0 of 7 lessons
0 of 16 cards The most common case in depth: take revenue and cost apart, find the driver with a profit bridge, then price and cut costs the way a team would on a real project.
B Basic4 lessons 1 The revenue side: price, volume, and mix Revenue is price times volume, but each of those splits further, and the split you pick decides which data you ask for. Mix is the driver candidates miss most. 9 min 2 The cost side: fixed, variable, and step costs Costs split into those that move with volume and those that do not. A third kind, step costs, moves in jumps, and it is where many capacity cases hide. 8 min 3 Contribution and operating leverage Contribution margin tells you what each sale adds. Operating leverage tells you how hard profit swings when revenue moves, which is why two clients with the same revenue drop can be in very different trouble. 8 min 4 Segment before you conclude A company wide number is an average, and averages hide the problem. Break results by product, region, customer, or channel before you say what is wrong. 7 min Q Basic quiz 10 questions, 80% passes A Advanced3 lessons 5 Building a profit bridge A bridge splits a profit change into price, volume, cost, and fixed cost effects that add up exactly. It turns "profit fell" into "profit fell mostly because of this". 10 min 6 Pricing cases: cost, competitors, and value Three ways to set a price: from your cost, from the competition, and from the value to the customer. The case answer usually uses all three as a floor, a reference, and a ceiling. 10 min 7 Cost reduction and operations levers A cost case asks where to cut without hurting revenue. Size each lever against a benchmark, find the bottleneck in operations, and close the gap to the target with numbers. 10 min Q Advanced quiz 10 questions, 80% passes