Asked by
Ibrahim Chalya
on Dec 15, 2024
Verified
A negative aspect of selecting unit volume as a pricing objective is that
A) production often cannot keep up with demand.
B) there are increased carrying costs with extensive inventories.
C) if price reductions are used to achieve volume objectives, it can sometimes come at the expense of profits.
D) it can create competition between divisions within the organization itself, causing conflicts over the allocation of resources.
E) it always positively correlates with a sales revenue objective.
Unit Volume
A measurement quantifying the number of units of a product sold or produced.
Volume Objectives
Objectives set by a company to achieve a specified quantity of sales or production volume within a certain timeframe.
Carrying Costs
Expenses related to holding inventory, including storage costs, insurance, and loss due to obsolescence.
- Describe the importance of pricing in reaching an organization's financial goals, such as the maximization of revenue and the optimization of profits.
- Comprehend the influence of external factors, such as competitor pricing and market demand, on a firm’s pricing decisions.
Verified Answer
LG
Learning Objectives
- Describe the importance of pricing in reaching an organization's financial goals, such as the maximization of revenue and the optimization of profits.
- Comprehend the influence of external factors, such as competitor pricing and market demand, on a firm’s pricing decisions.