Estimating profit performance from similar profit centers

A decision model involving discriminant analysis provides a method by which both upper and middle managers can avoid some pitfalls that are likely to result in the substantially subjective process of pertbrmance evaluation of profit centers. It is designed to provide more objective, more timely, and possibly more accurate information. The model is not designed to estimate the return on investment for a profit center. The resulting discriminate score provides a direct evaluation of a profit center’s management.