This Article Deals with the Product and Customer Profitability of Companies Based upon a Small Bakery
You can always create detailed business model, starting from a general ledger. This goes together with other product or sales related data.
The purpose of the exercise is based, among other things, on the consideration that decisions made every day in every company. The impact of this, for example, price for a product decision must also be understood in terms of profit in every individual transaction.
However, this requires a detailed business model.
That means creating a detailed business model that also shows the profit and loss account (P&L) for each dimension. This must be based on the cause-and-effect-based drivers. (Causality principle as applied in ActivityBasedCosting).
The company must therefore take appropriate operational measures to ensure that“stay profitable on each transaction”rules are applied. Then unprofitable transactions can not occur.
In a company with suitable profit and cost tools, plus, the knowledge which goes along with the software, a situation like the one shown in the picture below should not happen.