Question

USA Airlines uses the following performance measures. Classify each of the performance measures below into the most likely balanced scorecard perspective it relates to. Label your answers using C (customer), P (internal process), I (innovation and growth), or F (financial).

1. Cash flow from operations.	8. Accidents or safety incidents per mile flown.
2. Number of reports of mishandled or lost baggage.	9. Customer complaints.
3. Percentage of on-time departures.	10. Flight attendant training sessions attended.
4. On-time flight percentage.	11. Time airplane is on ground between flights.
5. Percentage of ground crew trained.	12. Airplane miles per gallon of fuel.
6. Return on investment.	13. Revenue per seat.
7. Market value.	14. Cost of leasing airplanes.

Short answer

1. Cash flow from operations.	F
2. Number of reports of mishandled or lost baggage.	C
3. Percentage of on-time departures.	C
4. On-time flight percentage.	C
5. Percentage of ground crew trained.	I
6. Return on investment.	F
7. Market value.	F
8. Accidents or safety incidents per mile flown.	I
9. Customer complaints.	C
10. Flight attendant training sessions attended.	I
11. Time airplane is on ground between flights.	P
12. Airplane miles per gallon of fuel.	P
13. Revenue per seat.	F
14. Cost of leasing airplanes.	F

Step-by-step solution

Definition of Internal Process

The processes performed by the business entities without any interference or influence from external parties are known as an internal processes.

Cash flow from operations

Cash flow from operation relates to a financial perspective because it reflects information relating to inflows and outflows of cash. Such information help in the determination of the liquidity and availability of cash within the business.

Number of reports of mishandled or lost baggage

The number of reports of mishandled or lost baggage relates to customers because it will affect their customer ratings and satisfaction levels

Percentage of on-time departures

The percentage of on-time departure will relate to the customer because the customer will get satisfied and dissatisfied based on timely departure. It also helps in acquiring new customers.

On-time flight percentage

On-time flight percentage relates to the customer because the satisfaction level of old customers and acquisition of new customers depends upon the on-time flight percentage.

Percentage of a ground crew trained

The percentage of a ground crew trained relates to innovation and growth because this section of the balanced scorecard reports money spent on the training of employees.

Return on investment 

Return on investment is related to the financial perspective of a balanced scorecard because it provides information regarding the business’s profitability

Market value

Market value is also related to the financial perspective of a balanced scorecard because it provides information regarding the value of the asset in the market or cash that can be generated by selling assets in the market.

Accidents or safety incidents per mile flown

Accident or safety incidents per mile flown relate to the internal process perspective of a balanced scorecard because it reflects the defect rates and flights without accident.

Customer complaints

Customer complaints relate to the customer perspective of a balanced scorecard because it will bring downs the ratings given by the customer based on satisfaction

Flight attendant training sessions attended

Flight attendant training sessions attended relate to the innovation and growth perspective of the balanced scorecard because it will include the cost incurred on the respective training of the employees

Time airplane is on the ground between flights

Time airplane is on the ground between flights related to the internal process perspective of the balanced scorecard because it relates to the cycle time of the airlines.

Airplane miles per gallon of fuel

Airplane miles per gallon of fuel relates to the internal process perspective of the balanced scorecard because it will help in the determination of costs incurred by airlines.

Revenue per seat

Revenue per seat relates to the financial perspective of the balanced scorecard because it will lead to an inflow of benefits and will increase the net income

Cost of leasing airplanes

The cost of leasing airplanes relates to the financial perspective of the balanced scorecard because it will be included in the determination of the net income of the business entity.