1. Confidential

2. Product and Customer Profitability1

3. Overview 2

4. Overview – Management Information3

5. Overview – Management Information4

6. Overview – Why Do You Need It?5

7. Overview – Why Do You Need It?6

8. Overview – Why Do You Need It?
Source: The Kafafian Group, Inc. 7

9. Overview – Why Do You Need It?
Source: The Kafafian Group, Inc. 8

10. Overview – Why Do You Need It?
Source: The Kafafian Group, Inc. 9

11. Overview – Why Do You Need It?
Source: The Kafafian Group, Inc. 10

12. Overview – Why Do You Need It?
Source: The Kafafian Group, Inc. 11

13. Overview – Why Do You Need It?12

14. Overview 13

15. Overview 14

16. Overview 15

17. Overview 16

18. Overview 17

19. Overview 18

20. Funds Transfer Pricing (FTP)19

21. Funds Transfer Pricing (FTP)20

22. Funds Transfer Pricing (FTP)21

23. Funds Transfer Pricing (FTP)22

24. Capital Assignment 23

25. Capital Assignment 24

26. Capital Assignment 25

27. Capital Assignment
RAROC: Customer Sample 26

28. Cost Assignment 27

29. Cost Assignment
Source: The Kafafian Group, Inc. 28

30. Cost Assignment
Source: The Kafafian Group, Inc. 29

31. Step-Variable Costs
A step-variable cost is a resource that is obtainable only in large chucks and whose costs change only in response to fairly wide changes in activity. For example, maintenance workers are often considered to be a variable cost, but this labor cost does not behave as a true variable cost. 30

32. Step-Variable Costs
Small changes in the level of production are not likely to have any effect on the number of maintenance workers employed. 31

33. Step-Variable Costs
Only fairly wide changes in the activity level will cause a change in the number of maintenance workers employed. For example, maintenance workers are obtainable only in large chunks of a whole person who is capable of working approximately 2,000 hours a year. 32

34. Building a Good System 33

35. Building a Good System 34

36. ROI Exercise
Source: The Kafafian Group, Inc. 35

37. Customer Profitability Exercise
Source: The Kafafian Group, Inc. 36

38. Product and Customer Profitability37