Performance Management
Using financial and non-financial information to make and track strategic decisions, following one invented Minneapolis equipment maker: value driver trees for return on capital employed, KPIs, targets, OKRs and dealer profitability, relevant costing for make-or-buy and special orders, constrained product mix with throughput accounting and linear programming, decision trees and the value of information, pricing with elasticity, target costing and life-cycle costing, capital investment with MACRS and bonus depreciation tax shields, capital rationing and real options, enterprise risk management with Monte Carlo budgets and rolling forecasts, the cost of quality, sustainability information as California and customer reporting demands grow, and an integrated plan presented ethically to a board.
ACCT-421 Year 4 3 credits 12 lessons · 5 h 41 min
Offered by HSM University · Accounting
This is the American version of this course. See the Canadian version.
What you'll learn
- Explain how performance management links strategy, decisions, measurement and learning, and build a value driver tree for return on capital employed.
- Design KPIs, targets and OKRs that combine leading and lagging indicators, and recognize when measures distort behavior.
- Identify relevant costs, including opportunity and avoidable fixed costs, for make-or-buy, outsourcing and special order decisions.
- Choose the product mix under one or more constraints using contribution per scarce resource, throughput accounting and linear programming, and interpret shadow prices.
- Analyze decisions under uncertainty with expected values, decision trees, the value of information and sensitivity analysis.
- Set and evaluate prices using cost-plus methods, customer value, price elasticity, target costing and life-cycle costing.
- Evaluate strategic capital investments including MACRS and bonus depreciation tax shields, inflation and sensitivity, under current US tax rules.
- Allocate rationed capital among projects, value simple real options and design post-investment reviews.
- Apply enterprise risk management frameworks, express risk appetite in testable terms and use key risk indicators.
- Use Monte Carlo simulation and driver-based rolling forecasts to represent uncertainty in plans.
- Measure the cost of quality and incorporate sustainability considerations, including internal carbon prices and the current reporting landscape, into decisions.
- Assemble, present and monitor an integrated performance plan while meeting professional and ethical obligations.
Course content
12 lessons · 5 h 41 min total · final exam
- 1 Performance management: linking strategy, decisions and results 29 min · quiz
- 2 Designing KPIs, targets and OKRs 30 min · quiz
- 3 Relevant costing: make-or-buy, outsourcing and special orders 28 min · quiz
- 4 Constrained decisions: product mix, theory of constraints and throughput accounting 28 min · quiz
- 5 Linear programming and shadow prices 27 min · quiz
- 6 Decision analysis under uncertainty 29 min · quiz
- 7 Pricing I: costs, value and elasticity 27 min · quiz
- 8 Pricing II: target costing, life-cycle costing and competitive pricing 28 min · quiz
- 9 Strategic capital investment and depreciation tax shields 27 min · quiz
- 10 Capital rationing, real options and post-investment review 28 min · quiz
- 11 Enterprise risk management and planning under uncertainty 28 min · quiz
- 12 Capstone: quality, sustainability and an integrated performance plan 32 min · quiz
- E Final exam 20 questions
Requirements
Recommended background. You can start any course at any time.
Description
Using financial and non-financial information to make and track strategic decisions, following one invented Minneapolis equipment maker: value driver trees for return on capital employed, KPIs, targets, OKRs and dealer profitability, relevant costing for make-or-buy and special orders, constrained product mix with throughput accounting and linear programming, decision trees and the value of information, pricing with elasticity, target costing and life-cycle costing, capital investment with MACRS and bonus depreciation tax shields, capital rationing and real options, enterprise risk management with Monte Carlo budgets and rolling forecasts, the cost of quality, sustainability information as California and customer reporting demands grow, and an integrated plan presented ethically to a board.
Part of the Business stream, typically taken in year 4.