Evaluating Performance Using Metrics Paper

Evaluating Performance Using Metrics

Identifying the profit centers, cost centers, and investment centers of the company.

From reviewing Anthony Orchards organizational structure information the profit centers of the company are the sales department and the operation department. The cost centers of Anthony Orchard is the operations and processing departments and marketing, and investment centers of the company is the finance and the accounting departments.

What are the indicators that each responsible party uses to evaluate performance?

The indicators that each responsible party uses to evaluate performance is different per the responsible of the department either it will be financial or non-financial (Zimmerman, 2011). The financial measure

for control where the non-financial measured for decision making (Zimmerman, 2011, p. 149)
How can a manager evaluate each unit's performance based on the metrics (with interpretation)?
The manger of a Cost Center would evaluate performance to control cost, where a managers of a Profit center would evaluated based on revenues and expenses and the Investment center would evaluate based on return on investment, the manager can either increase controllable margin or decrease average operating assets (Portz & Lee, 2010).
If put in charge of one of the cost centers, which would you want to manage and how would you propose managing it to ensure both short-term success and long-term sustainability?
To manage an investment center is to have the responsibility over revenues, expenses, and investments made in the company. The management use Return on investment (ROI) is often used to evaluate the investment center performance.
In addition, if the investment center is fairly large, as a manager, may have some influence on how the center is financed. The investment center may have the authority to decide when individual accounts payable shall be paid or may have its own line of short-term credit (Reece & Cool, 1978), the investment center is used by as an “extension of the profit center idea: profit is measured for both, but only in an investment center is this profit related to the size of the investment base”(Reece & Cool, 1978, p. 1), this allows for investment center to encourage the other center management to work vigorous to reduce assets will which increases ROI than just focus on just maximizing profitability.