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maximising sales and it is where AC=AR..this the point where the maximum amout of sales take place. The firm only makes a normal profit at this stage.
Wiki User
∙ 14y ago
Wiki User
∙ 9y agoBaulmoli theory implies the lower the price the higher the profit outcome. It is the maximization of sales as oppose to profit.
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What is sales maximization model?
Term sales maximization Definition: The notion that business firms (especially those operating in the real world) are primarily motivated by the desire to achieve the greatest possible level of sales, rather than profit maximization. On a day-to-day basis, most real world firms probably do try to maximize sales rather than profit. For firms operating in relatively competitive markets, facing relative fixed prices, and relatively constant average cost, then increasing sales is bound to increase profits, too. Moreover, according to the notion of natural selection, even firms that seek to maximize sales, those that also maximize profit will remain in business.
What are some shortcomings of the goal of profit maximization?
Profit maximization includes some shortcomings like it ignores the risk that corresponds to the project's stream of cash flow. The timing of returns are ignored with this objective and it does not have as much relevance to a monopoly firm.
Explain why operating leverage decreases as a company increases sales and shifts away from the break even point?
"Explain why operating leverage decreases as a company increases sales and shifts away from the break-even point."
Is there a difference between corporate profit maximization and maximization of shareholder wealth?
Sure, profit maximization relates to profits *only* while shareholder wealth also involves total company equity, debt ratios and any of 15 other financial performance measure ratios. Management could focus on profit maximization over a longer period of time, say, 40 years (Toyota), while the shareholder would rather see stock values and corporate total value increase immediately (get in and get out) (90% of American manufacturers). If management focused on short-term profit maximization, say at the expense of long term sales revenues, then shareholder wealth (stock price) could actually decrease as a result of the loss of market share. The conflict of interests between shareholders and executives is an example of the "principle-agent problem."
Among the multiplicity of objectives that a modern firm has profit maximization continues to be the most important Comment?
The success or failure of a firm is measured in terms of the amount of profit it is able to earn in a competitive market. Under profit management, one has to study various theories of profit, emergence of profit, functions of profit and its measurement, etc.Thoeries underlying the Objective of a Firm, mainly talk about the subject of Ethics in Business. Debate is going on since a long time, as to whether every Firm's Objective needs to be ETHICAL? the answer may seem as simple as "YES", but the counter arguements that follow are difficult to answer.Coming to Profit Maximization, the question goes as to whether Profit Maximization Goal is justitfied? In a private enterprise, no one can have control over Profit maximization. If the profits are made with the use of Society's resources, such profits need to be sowed back for Societal Development.The profit-maximization rule applies both to firms that are able to sell their product at a constant price and to firms that find they must reduce the price of their product to increase sales. In the real world, firms have to engage in trial-and-error discovery processes, searching for the profit-maximization point. But the process can be succinctly described by the marginal revenue-marginal cost rule.Profit is what is left over from a business after the bills are paid. without profit the company can not afford to re-invest in capital or have money to pay stockholders. I think Customer satisfaction if the basic motive and objective of firm. When we will more and more consider to satisfy customer needs and wants, automatically our secondary objective "profit maximization" will be achieved.
Sales maximization vs profit maximization?
sales maximization technique is generally used in scale industries where base of the expenses is largelly fixed and where variable costs are limited. on the other hand profit maximization technique are used by variety of industries. total output is higher in sales maximization as compared to profit maximization
What is the Difference between profit maximization and sale maximization?
The key difference between profit maximization and sales maximization focuses on the handling of costs/expenses. Sales maximization is a topline income statement action that attempts to maximize sales revenues. Sales maximization techniques are used in scale industries where the expense base is largely fixed and there are limited variable costs associated with acquiring the next dollar of sales. Profit maximization is a multiline income statement action that attempts to both maximize sales (as represented above) while minimizing expenses in order to maximize effective margin. Profit maximization techniques are used across a variety of industries.
What is the meaning of sales maximization?
i don t know
What theory that explain sales and inventory system?
hindi ko rin alam
What are the criticism baumol's sales maximisation model?
Criticism of Baumol's sales maximization model includes the assumption of profit maximization as the main goal of firms, the lack of consideration for other objectives like shareholder wealth maximization, and the oversimplification of managerial behavior by focusing solely on sales revenue. Additionally, critics argue that the model does not account for dynamic market conditions and competitive strategies that firms may adopt.
How does advertising helps in sales maximization?
advertises are main base of the sales,,,,,,,, becs then oly people came to know dat about the product
What is Three basic reasons is profit maximization inconsistent with wealth maximization?
Profit maximization is a narrow view which accounts for only the difference between sales and costs Wealth Maximization is broader and more philosophical in approach. Wealth maximisation includes not exhaustively culture , synergy, value, potential and wealth
Why is wealth maximization a better operating goal than maximization sale?
The wealth maximization increases the net value that is current. The maximization sale involves obtaining the highest amount of sales without incurring any loses. Each, especially when used together, can be the better operating goal depending on the situation in which they are needed to be used.
What is the Risk in profit maximization?
The risk is that by trying to maximize your profits the quality of the products will drop and you will eventually lose sales
What is sales maximization model?
Term sales maximization Definition: The notion that business firms (especially those operating in the real world) are primarily motivated by the desire to achieve the greatest possible level of sales, rather than profit maximization. On a day-to-day basis, most real world firms probably do try to maximize sales rather than profit. For firms operating in relatively competitive markets, facing relative fixed prices, and relatively constant average cost, then increasing sales is bound to increase profits, too. Moreover, according to the notion of natural selection, even firms that seek to maximize sales, those that also maximize profit will remain in business.
Explain the evolution of sales management function in Indian context?
explain the evolution of sales management function in Indian context
Whats the Definition of sales maximization?
Definition:An alternative theory to that which argues that firms seek to maximize profits. W.J. Baumol (Economic Theory and Operations Analysis, 1965) is generally recognized as having first suggested that firms often seek to maximize the money value of their sales, i.e. their sales revenue, subject to a constraint that their profits do not fall short of some minimum level which is just on the borderline of acceptability. In other words, so long as profits are at a satisfactory level, management will devote the bulk of its energy and efforts to the expansion of sales. Such a goal may be explained perhaps by the businessman's desire to maintain his competitive position, which is partly dependent on the sheer size of his enterprise, or it may be a matter of the interested management, since management's salaries may be related more closely to the size of the firm's operation than to its profits, or it may simply be a matter of prestige. It is also Baumol's view that short-run revenue maximization may be consistent with long-run profit maximization, and revenue maximization can be regarded as a long-run goal in many oligopolistic firms. Baumol also reasons that high sales attract customers to the popular product, cause banks to be receptive to the firm's financial needs, encourage distributors, and make it easier to retain and attract good employees.
