Profitability and efficiency
This category includes all KPIs that are related to the organization's profit. In addition to the well-known indicators of marginal income and net profit, more complex KPIs can be included here, indicating the level of business efficiency rather than direct benefits.
An example of a KPI in inventory management is the average number of days in inventory, which is referred to as days in inventory, which is a separate measure of profitability.
Profitability and efficiency
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Another example is estimating uruguay phone data average daily inventory, which is calculated by taking the organization's year-end inventory and dividing that number by the total annual value of products sold, then multiplying that number by 365 days.
Too little inventory can result in the loss of a customer because they will not receive the necessary product at the right time. However, it is difficult to identify this problem without introducing KPIs.
Another example of a metric that can help identify potential user losses is the number of times a particular item's stock reaches zero.
If a person still hasn't found the necessary product, you can ask him what exactly he needed. A gift certificate or a discount can be used as an incentive. This type of data can be usefully used by an analyst.
In the tourism industry, the occupancy rate of hotel rooms and vehicles acts as a KPI. For example, when at least one room remains unoccupied in a hotel, this is considered lost income.
Relative to the significant fixed costs, which are also called sunk costs, variable costs per unit of output are not so significant.
Risks
Safety in production is an indicator that reflects the number of fines and injuries. If this indicator increases, the organization risks losing its reputation and incurring material losses.
For this reason, it is important to keep records of situations in which safety violations occur, and to monitor the number and severity of injuries sustained by employees.
By monitoring reputational risks, an organization can avoid situations that could lead to negative opinions about the brand.
An indicator here would be a so-called first-level product recall. The time until that point is a good indicator of such a threat.
With financial risks, everything is even more obvious. If an organization has income that is not able to cover its debts, then there can be no talk of a good business. Therefore, the ratio of these parameters should be taken into account.
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Examples of KPIs for functions and departments
Management:
Customer lifetime value.
Return on equity.
Customer acquisition costs.
Sales target.
Net profit percentage.