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November 1990 (Revised May 2004)
Case

Mile High Cycles

By: William J. Bruns Jr.

Introduces the concept of cost variances. Looking at a bicycle manufacturer with one product and three departments, the case presents budgeted and actual data for material, labor, and overhead. View Details

Keywords: Cost; Business Divisions; Accounting; Bicycle Industry

September 1991 (Revised February 1993)
Case

Burroughs Wellcome and AZT (A)

By: Willis M. Emmons III

Burroughs Wellcome Co., developer of AZT, the first drug approved by the U.S. Food and Drug Administration for the treatment of Acquired Immune Deficiency Syndrome (AIDS), finds itself under siege in September 1989 by AIDS activists and various segments of the U.S.... View Details

Keywords: Governing Rules, Regulations, and Reforms; Ethics; Business and Government Relations; Communication Strategy; Health Care and Treatment; Monopoly; Intellectual Property; Research and Development; Price; Pharmaceutical Industry; London

March 1998 (Revised April 1998)
Case

Lehigh Steel

By: V.G. Narayanan and Laura Donohue

Lehigh Steel is a specialty steel manufacturer that plummeted from record profits to record losses in less than three years, driven by an inability to distinguish between profitable and unprofitable business. The scale and growth of service activities and overhead... View Details

Keywords: Measurement and Metrics; Product; Cost; Activity Based Costing and Management; Profit; Accounting; Corporate Finance; Steel Industry

March 2022 (Revised March 2024)
Case

Hometown Foods: Changing Price amid Inflation

By: Julian De Freitas, Jeremy Yang and Das Narayandas

During the early part of the 2021 Covid-19 pandemic, Hometown Foods, a large seller of flour-based products, thrived as consumers hoarded baked goods and took up baking to pass the time and find comfort. Then, amid growing shortages in commodities, a vaccine arrived,... View Details

Keywords: COVID-19 Pandemic; Consumer Behavior; Supply Chain; Inflation and Deflation; Spending; Price Bubble; Price; Volatility; Food and Beverage Industry

July 1989 (Revised April 2001)
Case

Kanthal (A)

By: Robert S. Kaplan

Multinational company needs an improved cost system to determine the profitability of individual customer orders. Its strategy is to have significant sales and profitability growth without adding additional administrative and support people. The new cost system... View Details

Keywords: Cost Accounting; Earnings Management; Cost Management; Financial Management; Multinational Firms and Management; Business or Company Management; Customer Relationship Management; Sales; Business Strategy; Profit; Electronics Industry

26 Jun 2007
Working Paper Summaries

Contracting in the Self-reporting Economy

Keywords: by Romana L. Autrey & Richard Sansing; Accounting

October 1992 (Revised August 1994)
Case

Allied-Signal: Managing the Hazardous Waste Liability Risk

By: Richard H.K. Vietor and Edward Prewitt

Allied-Signal, Inc., one of the world's oldest chemical companies and today a diversified conglomerate, is liable for clean-up costs of old hazardous waste sites. These costs are substantial: reserves grew to nearly $500 million in 1991. Attempting to avoid further... View Details

Keywords: Wastes and Waste Processing; Environmental Sustainability; Programs; Cost Management; Policy; Government Legislation; Factories, Labs, and Plants; Governance Compliance; Legal Liability; Chemical Industry; United States; Europe

February 1985 (Revised July 1986)
Case

Applichem (A)

Applichem has six plants in different countries making the same chemical product. The purpose of this case is to allow students to think about what costs are relevant to management in this process industry environment, about how to define a comparison of costs and... View Details

Keywords: Business or Company Management; Multinational Firms and Management; Performance Productivity; Operations; Performance Improvement; Chemical Industry

09 Jun 2011
News

Will Groupon Survive Until 2016?

September 2014 (Revised April 2016)
Case

Cree Inc.: Introducing the LED Light Bulb

By: John Gourville and Michael Norris

Cree, a North Carolina-based maker of light emitting diodes (LEDs), has just introduced its first consumer product—an LED light bulb. It is designed as an energy efficient replacement for the ubiquitous incandescent light bulb. But given that it is an unfamiliar... View Details

Keywords: Marketing; Innovation; Product Adoption; Technological Innovation; Technology Adoption; Energy Conservation; Product Launch; Consumer Products Industry; North Carolina

May 1994
Background Note

Designing Channels of Distribution

By: V. Kasturi Rangan

Presents a framework and a method for addressing the new product channel choice decision. Offers a six-step method that involves: 1) disaggregating and prioritizing a distribution channel by customers' channel function requirements; 2) obtaining and combining... View Details

Keywords: Distribution Channels; Framework; Cost; Customers; Cost vs Benefits; Management

18 Aug 2014
Research & Ideas

Have a Better Idea To Improve Health Care?

these innovations exist. (The remaining imperatives: Make value the central objective; promote novel approaches to process improvement; make consumerism really work; and decentralize approaches to problem solving.) "Health care, in terms of View Details

Keywords: by Carmen Nobel; Health

July 2001
Technical Note

Technical Note on LBO Valuation (B): The Equity Cash Flow Method of Valuation using CAPM

By: Carliss Y. Baldwin

Explains the equity cash flow method of valuation as it applies to leveraged buyouts. Also explains how to implement the changing cost of equity method using the CAPM. View Details

Keywords: Leveraged Buyouts; Forecasting and Prediction; Cash Flow; Cost of Capital; Equity; Valuation

Article

A Simple Solution to a Very Old Problem

By: Hoff Stauffer and Jurgen Weiss

The article addresses the problem of fixed cost recovery via variable electricity rates creating disincentives for utilities to engage in energy efficiency. The article provides one solution, which is to decouple fixed cost recovery from sales volumes, with the help of... View Details

Keywords: Energy Efficiency; Decoupling; Electricity; Utilities; Energy

June 2012 (Revised August 2013)
Case

Driving Towards a Disruption?

By: Willy Shih and William Noble

As Clayton Christensen drove to the studio to deliver an online executive education class, he pondered the future of management education. How big a threat did online degree programs, corporate universities, and other innovations in the delivery of management training... View Details

Keywords: Disruptive Technology; Performance Trajectories; Disruptive Innovations; Business Education; Business School; Internet And Online Services Industries; Disruptive Innovation; Higher Education; Corporate Strategy; Internet; Performance; Education Industry; Boston

2009
Working Paper

Altruistic Dynamic Pricing with Customer Regret

By: Julio J. Rotemberg

A model is considered where firms internalize the regret costs that consumers experience when they see an unexpected price change. Regret costs are assumed to be increasing in the size of price changes and this can explain why the size of price increases is less... View Details

Keywords: Inflation and Deflation; Price; Marketing; Consumer Behavior; Mathematical Methods

2019
Chapter

Return on Invested Capital (ROIC)

By: Carliss Y. Baldwin

Return on invested capital (ROIC) is a financial measure of the profitability of a firm or business unit. If it is greater than the business's cost of capital, then reinvestment of earnings increases shareholder VALUE. The ROIC also determines a maximum self-sustaining... View Details

Keywords: Capital Efficiency; Dupont Analysis; Financial Metrics; Schumpeterian Competition; Sustainable Growth; Competitive Advantage; Financial Strategy; Resource Allocation; Valuation; Value Creation

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