ACCA Strategic Professional · Advanced Performance Management · Performance hierarchy
Delmar Airlines has a CSF of 'operational efficiency'. Management wants a KPI set that provides early warning of problems rather than only reporting past results. Which KPI is the best leading indicator for this CSF?
Percentage of maintenance checks completed ahead of schedule is the best leading indicator because it predicts future delays and costs and allows early action. Past profit, fuel cost and complaints are lagging indicators that only report outcomes already experienced.
- APercentage of aircraft maintenance checks completed ahead of scheduleCorrect
- BOperating profit for the last quarter
- CTotal fuel cost for the last year
- DNumber of customer complaints received last month
Explanation
Maintenance completed ahead of schedule predicts future delays and cost, so it signals problems before they occur. Operating profit, past fuel cost and complaints already received are lagging measures reporting outcomes that have occurred.
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