RESULTS: How Achieved   >   NOP Leverage

    Enlarge Leverage Diagram
  • Most companies devote a good chunk of money to activities intended to drive revenue and volume to the business: Selling and Advertising are good examples. But which expenditures and resource commitments achieve the biggest bottom-line bang for the buck, and for which products and customers? These are important questions which determine how much money and time to devote and where.
  • The VDDW exposes NOP Leverage by way of simple cube calculations that divide NOP by activity expense for those activities that are volume-generating. The diagram to the right illustrates how this calculation is achieved. Another way of expressing Leverage, though it’s not diagrammed, is NOP / Contributed Resource Capacity. That is to say, for example, NOP / Sales Hours or NOP / Page-Space, with higher ratio’s representing superior returns on volume-generating activities.
  • The VDDW supports Leverage Analysis in completely ad hoc fashion, analyzable by customer, product, channel, location, or other combinations of interesting business dimensions.