Profitability analysis is a component of enterprise resource
planning (ERP) that allows administrators to forecast the profitability of a
proposal or optimize the profitability of an existing project. Profitability
analysis can anticipate sales and profit potential specific to aspects of the
market such as customer age groups, geographic regions, or product types.
Profitability analysis can help key personnel in an
enterprise to
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Identify the most and least profitable clients.
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Identify the most and least profitable products
or services.
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Discover which sources of information offer the
most reliable facts.
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Optimize responses to changing customer needs.
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Evolve the product mix to maximize profits in
the medium and long term.
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Isolate and remedy the causes of decreasing
profit margins.
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