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Using a Contribution Margin as a solution to the Business Strategy in the Crisis

Author

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  • Václav Leinweber

Abstract

An unexpected loss created due to outdated calculation methods can be avoided through contribution margin calculation. Contribution margin are great for sophisticated monitoring of up-to-date situation in the company and as well it provides much better information than the accounting system. When the most profitable product is identified through the contribution margin, the lean production can be performed. When this process is finalized, the production area not designed for production can be either sold out or otherwise eliminated.

Suggested Citation

  • Václav Leinweber, 2009. "Using a Contribution Margin as a solution to the Business Strategy in the Crisis," Ekonomika a Management, University of Economics, Prague, vol. 2009(3).
  • Handle: RePEc:prg:jnleam:v:2009:y:2009:i:3:id:71
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    More about this item

    Keywords

    Crisis; Krycí příspěvek; Contribution margin; krize; zeštíhlení; lean production;

    JEL classification:

    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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