Case Study

When to drop an unprofitable customer

$1.$ What does Westmid sell?

$2.$ What is the relationship strategy and customer buying process Egan has with Westmid?

$3.$ Explain the old method cost accounting and its impact on pricing and servicing the client.

$4.$ Explain the new method of costing and what did Tommy find? What doesn$$t the new method tell them?

$5.$ How does dropping the unprofitable customers effect the sales people? If you were a sales person how would you feel?

$6.$ What changes to the performance evaluation process would you need to make if you drop unprofitable customers.

$6.$ Write a $2$ paragraph memo recommending what Tommy should do about Westmid. Address what would be the expected pros and cons your recommendation. Remember you need to think about how your solution effects Egan$$s long term profitability and survival in this competitive market.