1. What is FedEx'sstrategy for success in the marketplace? Does the company rely primarily on acustomer intimacy, operations excellence, or product leadership customer valueproposition? What evidence supports your conclusion?

2. What are FedEx'sfour main business segments? Provide two examples of traceable fixed costs foreach of FedEx's four business segments. Provide two examples of common costs that are not traceable to the four business segments.

3. Identify oneexample of a cost center, a profit center, and an investment center for FedEx.

4. Provide threeexamples of fixed costs that can be traceable or common depending on how FedExdefines its business segments.

5. Compute themargin, turnover, and return on investment (ROI) in 2005 for each of FedEx'sfour business segments (Hint: page 99 reports total segment assets for eachbusiness segment.)

6. Assume that FedExestablished a minimum required rate of return of 15% for each of its businesssegments. Compute the residual income earned in 2005 in each of FedEx's foursegments.

7. Assume that thesenior managers of FedEx Express and FedEx Ground each have an investmentopportunity that would require $20 million of additional operating assets andthat would increase operating income by $4 million. If FedEx evaluates all of its senior managersusing ROI, would the managers of both segments pursue the investment opportunity? If FedEx evaluates all ofits senior managers using residual income, would the managers of both segmentspursue the investment opportunity?