Business Solutions for Your Profitable Future

Scoring Your Cost Reduction IQ Quiz

Scores of 8 and over indicate a strong understanding of world-class best practices. Scores under 8 indicate potential for improvement. You may be kidding yourself and wasting a lot of manpower and time if you have low scores.

Profit is a function of Expense, Loss, and Revenue. This evaluation had questions covering each of these three elements and processes in general. Which ones did you answer correctly? Cost reduction programs typically focus only on Expense leaving out the significant potential that is often associated with Loss and Revenue. Strength lies in well-designed processes.

There is obviously much more to the evaluation of profit improvement suggestions but this should give you a good idea of some of the key considerations.

I have seen many improvement programs that were built on the false promises of fool's gold. The projects looked attractive on paper but they never showed up on the bottom line.

Every program I run includes a module on how to make sure that every improvement project is adequately evaluated. Only real savings programs are undertaken. Make sure that your people know what is real and what is not!

Profit Equation: Elements of Profit

Profit Equation Component



1, 2, 5, 9


4, 6, 7


3, 10

General Process