Answer:
All of the above are true
Explanation:
- the Strategic Profit Model (SPM) can assist the logistics manager in the evaluation of cash flows and asset utilization decisions.
Strategic profit Model will contain several prediction on the firm's future profitability. This information will help managers to decide whether they should change the way they allocate their resources or to maintain the current usage in order to achieve their goals.
- the SPM fails to consider the timing of cash flows
The information that is made in Strategic Profit Model is based on the cash flows that received within one financial period. This create a little bit of weakness in this model since the timing of cash flows really determine whether the managers could or couldn't execute the decision. Having a plan to act while not having the resources to do it at the correct time will be useless.
- the SPM is subject to manipulation in the short run
Since the SPM is projected for the long run, managers could manipulate the data in order to please the shareholders.
- the SPM fails to recognize assets that are dedicated to specific relationships
SPM make its prediction based on generalization of all assets, liabilities, and equities that the company has. So, if there are assets owned to specific relationships, the SPM will still automatically consider it as part of assets that is used to generat profit. This will make the prediction become a little bit inaccurate.
