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PRODUCT DIFFERENTIATION
Product differentiation describes a situation in which there is a single product being manufactured by several suppliers, and the product of each supplier is basically the same. However, the suppliers try to create differences between their own product and the products of their rivals. It can be achieved through quality of service, after sales service, delivery dates, performance, reliability, branding, packaging, advertising or in some cases the differences may be more in the minds of the customers rather than real differences, but a successful advertising can create a belief that a service or product is better than others and thus enable one firm to sell more and at higher price than its competitors.
The Budget line and its economic interpretation The indifference curve shows us consumer preferences but it does not show us the situation in the market place. Here the consu
determine points in units and reorder quantity normal sales=2 month; reorder time=15days; max stock=6 units; safety stock=1 unit ( based on 95% customer''s satisfaction )
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State the Demand analysis Analysis of demand is assumed to forecast demand that is a basic component in managerial decision-making. Demand forecasting is of importance since
Increase in demand SS is the supply curve and D 1 D 1 the initial demand curve shifts to the right, to position D 2 D 2 . P 1 is the initial equilibrium price and q 1
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