Pricing and Product Decisions |
5. Relevant Costs |
• Relevant Costs and Revenues |
• Opportunity Cost |
• The Relevant Cost of Materials |
• The Relevant Cost of Labour |
• The Relevant Cost of Overheads |
6. Short-term decisions |
• Presentation guidelines |
• Acceptance/rejection of contracts |
• Minimum pricing |
• Extra shift decisions and overtime |
• Make or buy decisions |
• Either/or problems |
• Shutdown problems |
• Choosing between options |
• Allocation of joint costs |
7. Risk and uncertainty |
• Risk and uncertainty in decision making |
• Probability analysis and expected values |
• Data tables |
• The maximin, maximax and minimax regret bases for decision making |
• Using the standard deviation to measure risk |
• Decision trees |
• The value of information |
• Sensitivity analysis |
• Simulation models |
8. Linear programming: the graphical method |
• Graphical method |
• Graphical method using simultaneous equations |
• Sensitivity analysis |
9. Linear programming: the simplex method |
• Principles of the simplex method |
• Sensitivity analysis |
• Using computer packages |
• Using linear programming |
• Breakeven Analysis in a Multi-Product Environment |
10. Multi-product breakeven analysis |
• Drawing a basic breakeven chart |
• Breakeven point for multiple products |
• Contribution to sales (C/S) ratio for multiple products |
• Sales/product mix decisions |
• Target profits for multiple products |
• Margin of safety for multiple products |
• Multi-product breakeven charts |
• Further aspects of breakeven analysis |
• Sensitivity analysis |
11. Pricing decisions and pricing strategies |
• Demand base pricing |
• Other issues that influence pricing decisions |
• Deriving the demand curve |
• Profit maximizing price |
• Full cost pricing |
• Marginal cost-plus/Mark-up pricing |
• Pricing based on mark-up per unit of limiting factor |
• Pricing strategies for new products |
• Other pricing strategies |