Which of the following performance measures would be classified as a lag indicator for a coachline company whose objective was to improve profitability?
A) Number of new passengers each month
B) Profitability of each trip
C) Cost of diesel fuel
D) Average ticket cost per kilometre

Question

Quizplus · Accepted Answer

The profitability of each trip is a lag indicator as it reflects historical performance after costs have been incurred and revenue has been generated. It is a result of multiple factors such as fuel costs, ticket prices, and number of passengers, which are leading or concurrent indicators. The number of new passengers (A), cost of diesel fuel (C), and average ticket cost per kilometre (D) are all leading or concurrent indicators that can impact profitability but do not directly reflect it.

Which of the Following Performance Measures Would Be Classified as a Lag