A junior executive is given the task of calculating a benchmark common in the ship building industry - cost per compensated gross ton. Although raw data is available for its components, the executive must formulate relationships between the data to determine the benchmark. The case is designed to provide: 1) an introduction to the construction and use of benchmarks in quality management; 2) practice in conceptualizing a problem and designing a basic spreadsheet model to solve the problem. The modeling procedure uses an influence diagram as the basis for constructing the spreadsheet model, this spreadsheet model is available, product 7B05D011.
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