Colorscope is an example of a small firm seeking ways to compete in an increasingly intense competitive environment in pre-press printing. The external environment had changed with the advent of new technology, and new players entering the market had increased the supply side of the industry. Because Colorscope was not the market leader, its only option is to adopt a cost containment and quality control strategy. A simplified activity-based costing system was used to measure customer profitability. Complications: Colorscope found that many customers were unprofitable, and a few customers were responsible for most of the firm's profits. On further analysis, it was determined that rework, initiated through internal defects or by customers, formed a major cost item. Questions: 1. Based on the information provided in the case, the firm has to decide on questions such as: a. Customer pricing and b. Process improvement decisions 2. Was there need for incremental or radical change in its operations? 3. Considering the size of the operations and cost of rework, it needed to control costs n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. and quality control strategy. A simplified activity-based costing system was used to measure customer profitability. Colorscope found that many customers were unprofitable, and a few customers were responsible for most of the firm's profits. On further analysis, it was determined that rework, initiated through internal defects or by customers, formed a major cost item.

The firm had to decide on questions such as customer pricing and process improvement decisions based on this information. Was there need for incremental or radical change in its operations? Considering the size of the operations and cost