In a gap analysis, one of the most frequently used approaches in measuring operating income is:

In a gap analysis, one of the most frequently used approaches in measuring operating income is:
A . the Lost Opportunity.
B . the Profitability Increase.
C . the Order to Shipment Time.
D . the Won Opportunity.

View Answer

Answer: B

Explanation:

According to the ASCM CTSC Exam Content Manual, one of the most frequently used approaches in measuring operating income in a gap analysis is the profitability increase. The profitability increase is defined as "the difference between the current operating income and the potential operating income that could be achieved by implementing the best practices identified in the gap analysis"1. The profitability increase reflects the potential improvement in the organization’s financial performance by closing the gaps in its supply chain processes. The profitability increase can be calculated by multiplying the gap percentage by the current operating income1.

1: ASCM CTSC Exam Content Manual, page 15.