Computer Firm – CEO and Controller
How could the leading provider of fault-tolerant, redundant computer systems determine its cost-of-sales? What were the appropriate levels of sales support, administration, and overhead? Outcome: Report to senior management determined the need for an activity and transaction-based costing and pricing model. The structure and template for this model was developed and approved.

Timber Company – VP, Redwood Operations
How could the owner of the largest stand of old-growth redwood trees maximize its yield? What were the long-term price trends for this specialty lumber? Would it be better to harvest the timber now or in the future? Outcome: The project evaluated various analogs for old-growth redwood as well as potential future uses for clear heart timber. The closest parallel was determined to be black walnut, an extremely valuable and rapidly appreciating timber. Old-growth redwood was forecast to become a rare, specialty wood with increasing uses and an average price appreciation of at least 5% after inflation. As a result, the company elected to keep its stand intact for an extended period, ultimately selling the holdings for a large capital gain.

Mining Conglomerate – VP, Metallurgical Coal
Could the metallurgical coal division of one of Australia’s largest mining conglomerates justify an investment in an open pit mine in British Columbia? Would the cost structure of a new operation enable the firm to competitively serve the Japanese steel market with coking coal? Did the overall supply and demand balance justify a new mine? Outcome: The project modeled a new mine by analyzing existing operations. Costs for labor, capital assets, infrastructure, and royalties were factored into the feasibility study. The specific geography was factored into the analysis so that overburden, excavation, and refining costs were accurate. The supply and demand analysis indicated that a new mine was not a good idea at the time. However, another newly-opened mine of similar scale and capacity was acquired. The costs for this operation were within 3% of the model’s projections.

Canadian Courier Company – CEO and CFO
How could Canada’s largest courier use cost information to help its return to profitability? Would an activity-based customer cost system be accurate enough to guide contract negotiations? Would prices created by such a system "stick" in a competitive marketplace? Outcome: The project produced the design and tested architecture for the new cost/price system. Analysis of the top 600 customers indicated which were unprofitable and what price increases were needed. The annual customer contracts were renegotiated based on this information. In combination with extensive cost cutting, the new pricing system resulted in the firm's most profitable year.