3. Differential Analysis Model Change in Profit Profit = Profit - Operating Profit Change in Fixed Costs Fixed Costs = Fixed Costs - Less Fixed Costs Change in CM CM CM Total Contribution Margin (CM) Change in VC VC = VC - Less Variable Costs (VC) Change in Revenue Revenue Revenue Revenue Difference Status Quo = Alternative -
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8. Review the Value Chain R & D Design Produc- tion Market- ing Distrib- ution Customer Service Costs Value Chain Activities Premanufacturing (Upstream) Manufacturing Post-manufacturing Downstream