The purpose of this paper is to re‐introduce the APC model (developed by the American Productivity Center) through a spreadsheet application of the model in a real‐world setting, with a case study of Harlingen Waterworks, Texas, USA.
This paper introduces a performance measurement system using a multi‐factor productivity measurement model in a real‐world setting. The model uses operational‐level accounting data such as quantities and prices of inputs and outputs of a revenue‐generating organization. Such operational data is rarely published or shared by for‐profit organizations. Thus, the study focused on a government‐run enterprise that cannot claim confidentiality. Since water utilities are experiencing financial pressures, this application is very timely. The spreadsheet‐based implementation, using multi‐period data, generates performance trend charts of productivity, price recovery and profitability contributions that give a better perspective to managers in identifying the problem areas.
As shown in this paper, the spreadsheet‐based application using the APC model has provided a better understanding of problem areas at Harlingen Waterworks.
The contribution of this paper is the actual application of the APC model using multi‐period data, and the outcomes of the application in a real‐world setting. This application is useful to any public or private organization generating revenues. The APC model, in this instance, is intended to provide readily interpretable performance feedback for financial managers.
