Chapter 4

Why doesn't dropping a losing product raise profit?

Bỏ sản phẩm lỗ, sao lãi chung không tăng?

The chapter's question

How much would dropping this product really save?

Big idea

Dropping a product does not save the overhead it is currently carrying.

In this chapter

  1. Part 4.1

    Costs That Go and Costs That Stay

    Which costs disappear when the product disappears?

  2. Part 4.2

    Where the Overhead Goes

    Whom does the overhead it carries fall onto instead?

  3. Part 4.3

    Revenue That Leaves With It

    What else do the customers of this product buy?

  4. Part 4.4

    Decide Over What Horizon

    How do the short-term and long-term answers differ?

The reading for this chapter is inside Conan School

This chapter has 4 readings, with case stories and exercises. Chapter 1 of What It Actually Costs is free to read right here.

Read in Conan School

Chapters of What It Actually Costs

  1. 1.Is there a fair way to split overhead?
  2. 2.What is this product costing me that nobody records?
  3. 3.Is my biggest customer really my most profitable?
  4. 4.Why doesn't dropping a losing product raise profit?
  5. 5.How long does a cost sheet stay true?