Case Study: When to Drop an Unprofitable Customer
Harvard Business Review
JANUARY 25, 2012
Editor's Note: This fictionalized case study will appear in a forthcoming issue of Harvard Business Review, along with commentary from experts and readers. I'm flattered by such an august delegation," Steve said. With careful study, Tommy had figured out that the company's costing system had made it blind to its own operations: It allocated factory overhead to products as a percentage markup over direct labor costs, and corporate overhead as a percentage of sales.