Exam L5M10 Topic 1 Question 46 Discussion
Actual exam question for CIPS's L5M10 exam
Question #: 46
Topic #: 1
Question #: 46
Topic #: 1
Green Frog Ltd is a consultancy with ~50 customers. The CEO plans to use a Cost-to-Serve (CTS) tool to understand customer profitability. Is this the right approach?
Suggested Answer: A Vote an answer
Comprehensive and Detailed Explanation From Exact Extract:
Cost-to-Serve analyses end-to-end activities and resources consumed to serve specific customers or segments, exposing variation in profitability (e.g., delivery distance, visit frequency, handling complexity). It is appropriate for finding unprofitable customers. CTS is not inherently "expensive," and TCO focuses on lifecycle cost of acquiring/owning goods-not customer profitability. (Reference: CIPS L5M10 Study Guide, Cost-to-Serve concept and uses, p. 61)
Cost-to-Serve analyses end-to-end activities and resources consumed to serve specific customers or segments, exposing variation in profitability (e.g., delivery distance, visit frequency, handling complexity). It is appropriate for finding unprofitable customers. CTS is not inherently "expensive," and TCO focuses on lifecycle cost of acquiring/owning goods-not customer profitability. (Reference: CIPS L5M10 Study Guide, Cost-to-Serve concept and uses, p. 61)
by Marina at Nov 17, 2025, 09:44 PM
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