A simple and accurate thermodynamic model is presented for a four-heat-reservoir, absorption chiller. The performance of chillers, as described by I/COP, is expressed in terms of the dominant external and internal losses that stem from the finite-rate heat transfer and internal entropy generation in the absorber condenser, generator and evaporator. It is found that the relative contributions from these losses of absorption chillers govern their behavior over a wide range of cooling capacities. The successful formulation of the thermodynamic model, as presented in this article, implies that all previous endoreversible approaches are inadequate because they cannot portray the real behavior of absorption chillers accurately. At best, these models give only the upper bounds of experimental realities and thus they can be viewed only as subsets of the generic thermodynamic approach described here. To this end, we present evidence from an experimental facility to show that true absorption chiller behavior is governed by the presence of three key competing losses, namely, the finite-rate heat transfer losses, the internal dissipative losses, and heat leaks.