A company contains several profit centers, all of which face the same numerous environmental and economic circumstances. In view of this, the company assesses the performance of it profit centers against one another rather than against budget targets. This style of performance assessment is called:
A) Variance analysis.
B) Management by exception.
C) Activity-based management.
D) Relative performance evaluation.

Question

Quizplus · Accepted Answer

Relative performance evaluation involves comparing the performance of different units or individuals within an organization against each other, rather than against fixed targets or budgets. This approach is particularly useful in situations where external factors affect all units similarly, making direct comparisons more meaningful for assessing relative efficiency or effectiveness.

A Company Contains Several Profit Centers, All of Which Face