Lesson 4 - KPI's Flashcards
What is the role of KPIs?
KPI’s allow a business to constantly review their performance by providing data that measures how well it is progressing towards its given objectives
How can KPI’s be used in a business?
- Gather information about current performance of the business
- Set objectives
- Inform and initiate change
- Evaluate change
True or False?
The number of sales can indicate whether a business is running efficiently?
True
Which car manufacturers had more of the market share?
In 2009, 937,328 new vehicles were sold in Australia; 350,991 of those were Toyota sales. Ford sold 102 000, Skoda sold 50 000.
Toyota had more of the market share
True or False?
The definition of net profit is:
calculated by deducting total taxes incurred from total revenues earned over a period.
False: Net profit figures are calculated by deducting total expenses incurred from total revenues earned over a period.
How do you calculate the rate of productivity growth?
Compare the amount of output produced to the amount of input (resources) going into production from one defined time period (e.g. year) to the next
Write down the formular for the rate of productivity growth
(𝑶𝒖𝒕𝒑𝒖𝒕/𝑰𝒏𝒑𝒖𝒕 𝑵𝒐𝒘 −𝑶𝒖𝒕𝒑𝒖𝒕/𝑰𝒏𝒑𝒖𝒕 𝑷𝒓𝒆𝒗𝒊𝒐𝒖𝒔)/(𝐨𝐮𝐭𝐩𝐮𝐭/𝐢𝐧𝐩𝐮𝐭)
Which is the correct answer when using a level of waste as an indicator in a business?
a) Reduction of waste means that an organisation can cut costs leading to greater profit
b) High levels of waste can indicate a negative impact on the environment
c) More staff need to be hired to clean up the waste
d) a and b
d) A and b
Identify the most appropriate key performance indicator (KPI)
The operations manager has noticed a steep increase in material costs since the business employed a number of apprentice workers.
Level of wastage
Identify the most appropriate key performance indicator (KPI)
The sales manager is concerned about the number of people purchasing products compared with the number of people coming through the door.
Number of sales
Identify the most appropriate key performance indicator (KPI)
Revenue less expenses is greater than the previous financial period.
Net profit figures
Exam Practice Question: Use IDL to answer the following question:
Jordan owns Trevor Smith Sports and has decided to invest $15,000 in a social media advertising campaign to promote a new range of cricket equipment.
Identify and explain one KPI that Trevor should use to monitor the success of his campaign. (3 marks)
The best KPI for Shriya to use to monitor the success of her marketing campaign would be the number of sales KPI. (Identify)
The best KPI for Trevor to use to monitor the success of his marketing campaign would be the number of sales KPI. (Identify)
This would allow Trevor to monitor the level of sales that the business is experiencing and would therefore indicate whether the campaign was successful in delivering results and increasing sales. (Describe)
If Trevor realises after looking at the KPI that sales have not increased as intended this could trigger some remedial actions in order to improve the performance of the campaign and therefore allow him to get back on track in order to achieve his objectives, this might involve reducing the price or running a special promo to encourage customers to purchase the weight-lifting equipment. (Link)
