Supply chain management Flashcards
describe practical rationalising
mundane day to day activities.
calculate all possible means available to them and choose the best alternative
describe Theoretical rationality
logical deduction, causality and arrangement of symbolic meanings.
theoretical is a cognitive process.
describe substantive rationality
clusters of values that guide people in their daily lives.
can be limited specifically to economic action
describe formal rationality
means to and end based on rules and regulation.
for large-scale structures (like bureaucracy)
describe temporal discrepancies
when a product is produced, but a customer is not ready to buy it
describe spatial discrepancies
the difference between the location of a producer and the location of widely scattered markets
describe discrepancy of quantity
the difference between produced and wanted
describe discrepancy of assortment
the lack of all the items a customer needs the receive full satisfaction from a product
advantages of penetration pricing
blocks competition from market entry.
encourages new buyers to try, as less of a risk.
disadvantages of penetration pricing
requires gear-up for mass production.
selling large volumes at low prices.
may fail to gain market share.
describe price skimming
high initial price, then lowers over time
define market share
a company’s product sales in proportion to total market sales
revenue =
unit price x number of units sold
price skimming is successful when?
inelastic demand, superior product, breakthrough
% price of goods
traditionally 5-10.
now 17%, coz oil prices
