Product Suite

Supply Chain Glossary - P

Supply Chain Glossary - P

profit center

An assigned responsibility center that has authority to affect both the revenues earned and the costs incurred by and allocated to the center. Operational effectiveness is evaluated in terms of the amount of profit generated.

1) The difference between the sales and cost of goods sold for an organization, sometimes expressed as a percentage of sales. 2) In traditional accounting, the product profit margin being the product selling price minus the direct material, direct labor, and allocated overhead for the product, sometimes expressed as a percentage of selling price.


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