An example of an internal nonfinancial benchmark is:
A. The labor rate of comparably skilled employees at a major competitor’s plant.
B. The average actual cost per pound of a specific product at the company’s most efficient plant.
C. A US $50,000 limit on the cost of employee training programs at each of the company’s plants.
D. The percentage of customer orders delivered on time at the company’s most efficient plant.
Explanation:
Benchmarking is a continuous evaluation of the practices of the best organizations in their class and the adaptation of processes to reflect the best of these practices. It requires analysis and measurement of key outputs against those of the best organizations. This procedure also involves identifying the underlying key actions and causes that contribute to the performance difference. The percentage of orders delivered on time at the company’s most efficient plant is an example of an internal nonfinancial benchmark.