Industry Tradeoff Preferences

Table 16-5 identifies twenty-one industries that were surveyed on their preferential process for trade-offs. Obviously, there are variables that affect each decision. The data in the table reflect the interviewees' general responses, neglecting external considerations, which might have altered the order of preference.

Table 16-6 shows the relative grouping of Table 16-5 into four categories: project-driven, non-project-driven, nonprofit, and banks.

In all projects in the banking industry, whether regulated or nonregulated, cost is the first resource to be sacrificed. The major reason for this trade-off is that banks in general do not have a quantitative estimation of what actual costs they incur in providing a given service. One example of this phenomenon is that a number of commercial banks heavily emphasize the use of Functional Cost Analysis, a publication of the Federal Reserve, for pricing their services. This publication is a summary of data received from member banks, of which the user is one. This results in questionable output because of inaccuracies of the input.

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