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Going rate or follow the crowd pricing:-
In this method the firm price its products at the similar level as that of the competition. This method supposes that there will be no price war within the industry. This is a method commonly used in an oligopolistic market. Despite its benefit of preventing price wars the method suffers from serious limitations. The first is that it is not of necessity true that all firms or the leader firm is operating efficiently. In case it is not, it will mean that the follower firm will also adopt a price level, which reflects the leader's inefficiency rather its own efficiency. Besides it is not always true that a decision taken in collective wisdom is the best if might be certainly not being so from the customer's point of view.
Select Appropriate Alternative Courses of Action In practice, decision-making includes choosing among competing alternative courses of action and choosing the alternative which
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How do you compare two companies operating leverage? Must the sales volume be set the same or the net operating income?
Analysis Various business decisions have recurrent themes: whether to the outsource production or to the support functions, what level of production and pricing to establish, w
Question 1: A company's budgeted production of Product Zebra for the month ending 30 November 2004 was 10,000 units. The fixed overheads were budgeted at Rs3,200,000. The st
Ordering Costs These are incurred in getting purchased items into the company’s inventory or stores, and usually consist of clerical costs of: • Making the purchase demand.
Assigning Costs and Assets After identifying its value chain, a firm must assign operating activity and assets to value activities. Operating costs must be assigned to the act
Graphic method of break even analysis or break even chart The break even point can also be computed graphically. A break even chart is a graphical representation of marginal co
Shoe Shine is a local retail shoe shop located on the north side of Centerville. Yearly demand for a popular sandal is 500 pairs, and John Dirk, the manager of Shoe Shine, has been
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