You are selected to participate in a new bonus plan. You will receive a bonus based on the average cost of delivering a service. The fixed cost of that service is currently 75% of total costs. What action will you take to ensure you receive a bonus?
Do you notice all the instances of "you" in there? This is a question ONLY YOU can answer.
Please post what YOU THINK, and someone here will be happy to work with you on it, making suggestions or corrections.
Can lower the cost
To ensure you receive a bonus based on the average cost of delivering a service, you need to take an action that reduces the average cost of delivering that service.
Given that the fixed cost of the service is currently 75% of the total costs, the variable cost (which varies based on the level of service provided) accounts for the remaining 25% of the total costs.
To reduce the average cost, you have a few options:
1. Reduce the overall cost: You can try to find ways to reduce both the fixed and variable costs associated with delivering the service. This could involve optimizing processes, negotiating better deals with suppliers, or finding more cost-effective solutions.
2. Increase the level of service provided: By increasing the level of service provided while keeping the costs constant, the average cost per service delivered will decrease. This could involve improving the quality or efficiency of the service, leading to increased customer satisfaction.
3. Utilize economies of scale: If possible, you can try to increase the volume of services delivered without significantly increasing the costs. This could result in spreading the fixed costs over a larger number of services, thereby reducing the average cost.
It's important to note that the specific actions you can take to reduce costs and increase the level of service will depend on the nature and constraints of the particular service. It may be helpful to analyze the current cost structure, identify areas for improvement, and work with relevant stakeholders to implement effective strategies for cost reduction and service enhancement.