We have suggested • revenue (total quantity of good product sold per unit time) • operating expenses (operating budget of the plant) • assets (money tied up in plant, including inventories) as plant-level measures. How do these translate to the firm-level measures of total profit and ROI? Are there plant-level activities that are not reflected in the plant-level measures that affect the firm-level objectives? How might these be addressed?

Firstly, let us look at the meanings of the key terms mentioned in the exercise: 1. Revenue: The total quantity of good products sold per unit time. 2. Operating Expenses: The operating budget of the plant, including the expenses incurred to run the plant. 3. Assets: Money tied up in the plant, including inventories. 4. Total Profit: The revenue minus the total expenses (including operating expenses). 5. Return on Investment (ROI): The ratio of net profit and investment costs.

To understand how plant-level measures translate to firm-level measures, we need to consider the following relationships: 1. Total Profit = Revenue - Operating Expenses 2. ROI = (Net Profit / Investment) x 100 Here, the plant-level measures of Revenue and Operating Expenses contribute directly to the Total Profit, while the Assets are part of the Investment that affects the ROI.

Some plant-level activities might not be directly reflected in the plant-level measures, but they may still affect the firm-level objectives. These activities can include: 1. Research and development efforts 2. Employee training and development 3. Quality control measures 4. Safety, health, and environmental compliance costs 5. Reduction in waste and energy consumption These activities may not have a direct impact on revenue, operating expenses, or assets. However, they can significantly affect the long-term profitability and sustainability of the firm.

To address the unaccounted plant-level activities, firms can take the following steps: 1. Develop a comprehensive performance measurement system that includes both financial and non-financial metrics to monitor and evaluate the impact of these activities on the overall performance of the firm. 2. Establish targets and goals for unaccounted plant-level activities that are aligned with the firm's strategy and objectives. 3. Regularly review and update the measures to ensure that they reflect changes and improvements in the plant's activities. 4. Encourage a culture of continuous improvement, innovation, and employee engagement that supports these activities and strives towards achieving the firm-level objectives.