U4 4B KPIS part 1

Question 1

What is KPI?

Answer 1

KPI also known as key performance indicator
- is a type of measurement / criteria to help business understand how they’re performing in certain area

• measure business efficiency and effectiveness in achieving its different objectives.
• a good KPI should act as compass
• guiding businesses towards path they need to follow to achieve business objectives

Question 2

What must KPI do

Answer 2

• be well-defined & quantifiable
• give clear insight into area of business
• calculated properly / consistently
• provided quantitative data (facts / figure) to analyze
• be data itself rather than method of obtaining data

e.g number of customer complaints vs surveying customers for feedback

Question 3

ALL KPIS part 1

Answer 3

• percentage of market share
• net profit figures
• rate of productivity growth
• number of sales
• number of customer complaints

Question 4

KPI percentage of market share

Answer 4

• percentage of market share represents proportion of industry or market total sales
• earned by particular company over specified time period
• compared to total sales in industry expressed as pecentage figure

Question 5

calculating market share

Answer 5

calculated by taking company sales over period then divide by total sales in industry over same period

Question 6

KPI net profit

Answer 6

Net profit is company’s total revenue excluding total expenses

• showing what company has earnt or lost in given period of time

Question 7

calculating net profit figures

Answer 7

subtract total expenses incurred from total revenue over specific period of time.

Question 8

KPI rate of productivity growth

Answer 8

• rate of productivity growth is the increase in outputs produced from given level of inputs over time
• rate of productivity growth measures efficiency of company’s production process

Question 9

calculation of productivity growth

Answer 9

ratio of outputs produced compared to inputs required

Question 10

KPI number of sales

Answer 10

number of sales refer to measure of total amount of goods / services sold in given reporting period

Question 11

KPI number of customer complaints

Answer 11

• number of customer complaints refers to
• number of customers who notified business of dissatisfaction over specific period of time