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What determins the price of an item?

What determins the price of an item?. Correct! The price of an item is determined by those who buys it!. If nobody wants to pay for it, nobody will provide it. If people really want the item, they are willing to pay a lot for it. Thus, many will want to provide it in the long run.

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What determins the price of an item?

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  1. What determins the price of an item?

  2. Correct! The price of an item is determined by those who buys it!

  3. If nobody wants to pay for it, nobody will provide it.

  4. If people really want the item, they are willing to pay a lot for it. Thus, many will want to provide it in the long run.

  5. When a market turns out to be profitable, many new providers will appear on the scene.

  6. This is where the battle of market shares, cost effeciency and improved productivity begins.

  7. Running a business is very much about keeping a few cents of every dollar that passes through your hands.

  8. Many successful businesses may earn a profit as much as 15% of the turnover or maybe even less.

  9. That means that the first 85% or more of the turnover is just hard work and risky business!

  10. Effeciency can always be improved • Machinery and robots improves the manufactoring effeciency • Fork lifts and trolleys improves the warehouse effeciency • CAD solutions – Computer Aided Design – improves engineering effeciency • ERP solutions improves effeciency in administration throughout the organisation

  11. The company is a legal entity – a person: My company

  12. The owners supply capital: Owner Capital My company Liquidity The liquidity increases!

  13. Additional capital may be borrowed from a bank: Owner Bank Capital Capital My company Liquidity Debt Liquidity increases. Debt increases!

  14. Some liquidity is used to buy machinery, cars etc.: Owner Bank Capital Capital My company Machinery etc. Liquidity Debt Liquidity decreases!

  15. Items and services are bought at vendors on credit: Owner Bank Capital Capital Vendor My company Items Service Knowl. Debt Machinery etc. Liquidity Liquidity unchanged. Debt increases!

  16. Purchased items are now on raw material stock: Owner Bank Capital Capital Vendor My company Items Service Knowl. Raw Material Stock Debt Machinery etc. Liquidity Liquidity unchanged. Raw Material Stock increases!

  17. Purchase VAT is reimbursed from authorities: Owner Bank Capital Capital Vendor My company Items Service Knowl. Raw Material Stock Debt Machinery etc. Liquidity Purchase VAT Authorities Liquidity increases!

  18. Debt is paid to vendors: Owner Bank Capital Capital Vendor My company Items Service Knowl. Raw Material Stock Paym. Machinery etc. Debt Liquidity Purchase VAT Authorities Liquidity decreases. Debt decreases!

  19. Workers are employed: Owner Bank Capital Capital Vendor My company Items Service Knowl. Raw Material Stock Paym. Workers Service Knowl. Machinery etc. Debt Liquidity Purchase VAT Authorities All assets are unchanged!

  20. Raw material is refined by employees: Owner Bank Capital Capital Vendor My company Items Service Knowl. Raw Material Stock Paym. Refinement / Manufactoring Workers Service Knowl. Machinery etc. Debt Liquidity Purchase VAT Authorities Liquidity unchanged. Work in progress increases!

  21. Wages are paid to the workers: Owner Bank Capital Capital Vendor My company Items Service Knowl. Raw Material Stock Paym. Refinement / Manufactoring Workers Service Knowl. Machinery etc. Debt Liquidity Wages Purchase VAT Authorities Liquidity decreases!

  22. Refined items are now finished goods – ready to be sold: Owner Bank Capital Capital Vendor My company Items Service Knowl. Raw Material Stock Paym. Refinement / Manufactoring Workers Stock of finished goods Service Knowl. Machinery etc. Debt Liquidity Wages Purchase VAT Authorities Liquidity is unchanged. Stock of finished goods increased!

  23. Finished goods are sold to customers on credit: Owner Bank Capital Capital Vendor Customer My company Items Service Knowl. Raw Material Stock Paym. Refinement / Manufactoring Workers Stock of finished goods Service Knowl. Items Service Knowl. Machinery etc. Re- ceiv- able Debt Liquidity Wages Purchase VAT Authorities Liquidity is unchanged. Stock of finished goods decreases. Accounts receivable increases!

  24. Sales VAT is paid to Authorities: Owner Bank Capital Capital Vendor Customer My company Items Service Knowl. Raw Material Stock Paym. Refinement / Manufactoring Workers Stock of finished goods Service Knowl. Items Service Knowl. Machinery etc. Re- ceiv- able Debt Liquidity Wages Purchase VAT Sales VAT Authorities Liquidity decreases!

  25. Customer pays his debt: Owner Bank Capital Capital Vendor Customer My company Items Service Knowl. Paym. Raw Material Stock Paym. Refinement / Manufactoring Workers Stock of finished goods Service Knowl. Items Service Knowl. Machinery etc. Liquidity Debt Wages Purchase VAT Sales VAT Authorities Liquidity increases. Accounts receivable decreases!

  26. Interest and payment on loan is paid to the bank: Owner Bank Capital Capital Interest Payment Vendor Customer My company Items Service Knowl. Paym. Raw Material Stock Paym. Refinement / Manufactoring Workers Stock of finished goods Service Knowl. Items Service Knowl. Machinery etc. Liquidity Debt Wages Purchase VAT Sales VAT Authorities Liquidity decreases. Debt decreases!

  27. Machinery etc. Looses value and is depreciated : Owner Bank Capital Capital Interest Payment Vendor Customer My company Items Service Knowl. Paym. Raw Material Stock Paym. Refinement / Manufactoring Workers Stock of finished goods Service Knowl. Items Service Knowl. Liquidity Debt Machinery etc. Wages Purchase VAT Sales VAT Authorities Liquidity is unchanged. Value of machinery etc. decreases!

  28. Income tax of the profit is paid to authorities: Owner Bank Capital Capital Interest Payment Vendor Customer My company Items Service Knowl. Paym. Raw Material Stock Paym. Refinement / Manufactoring Workers Stock of finished goods Service Knowl. Items Service Knowl. Liquidity Debt Machinery etc. Wages Income tax Purchase VAT Sales VAT Authorities Liquidity is decreased!

  29. The owners expects dividend - a return on their investment: Owner Bank Capital Capital Interest Payment Dividend Vendor Customer My company Items Service Knowl. Paym. Raw Material Stock Paym. Refinement / Manufactoring Workers Stock of finished goods Service Knowl. Items Service Knowl. Debt Machinery etc. Liquidity Wages Incometax Purchase VAT Sales VAT Authorities Liquidity decreases!

  30. Schematic cash flow in a manufactoring cycle, 100 units

  31. Schematic cash flow in a manufactoring cycle, 150 units

  32. Schematic cash flow in a manufactoring cycle, 150 units Missing sale may cause liquidity to be tied longer Delayed payments may cause liquidity to be tied longer

  33. Keywords for an ERP solution • Easy customization • Rapid implementation • Intuitive and logic user interface • 100% reliable data is a must. Data are used for making decisions and has to be migrated seamlessly from version to version • 100% reliable service during business hours is a must. Tools and information has to be at hand constantly.

  34. Warehouse Management Shipping desk Finance and administration Purchase Receiving desk Sales

  35. Warehouse Management Shipping desk Finance and administration Purchase Receiving desk Sales Request

  36. Warehouse Management Shipping desk Finance and administration Purchase Pricing Receiving desk Sales Request

  37. Warehouse Management Shipping desk Finance and administration Purchase Quote Pricing Receiving desk Sales Request

  38. Warehouse Management Shipping desk Finance and administration Purchase Quote Pricing Receiving desk Sales Request Order

  39. Warehouse Management Shipping desk Pick Finance and administration Purchase Quote Pricing Receiving desk Sales Request Order

  40. Warehouse Management Shipping desk Pick Finance and administration Purchase Quote Pricing Receiving desk Sales Request Order

  41. Warehouse Management Shipping desk Shipment Pick Finance and administration Purchase Quote Pricing Receiving desk Sales Request Order

  42. Warehouse Management Shipping desk Shipment Pick Invoice Finance and administration Purchase Quote Pricing Receiving desk Sales Request Order

  43. Warehouse Management Shipping desk Shipment Pick Invoice Invoice Finance and administration Purchase Quote Pricing Receiving desk Sales Request Order

  44. Warehouse Management Shipping desk Shipment Pick Invoice Invoice Finance and administration Purchase Quote Pricing Receiving desk Sales Request Order

  45. Warehouse Management Shipping desk Shipment Pick Invoice Invoice Finance and administration P.O. Purchase Quote Pricing Receiving desk Sales Request Order

  46. Warehouse Management Shipping desk Shipment Pick Invoice Invoice Finance and administration P.O. Purchase P.O. Quote Pricing Receiving desk Sales Request Order

  47. Warehouse Management Shipping desk Shipment Pick Invoice Invoice Finance and administration P.O. Purchase P.O. Quote Pricing Receipt Receiving desk Sales Request Order

  48. Warehouse Management Shipping desk Shipment Pick Invoice Invoice Finance and administration P.O. Purchase P.O. Quote Pricing Receipt Receiving desk Sales Request Order

  49. Warehouse Management Shipping desk Shipment Pick Invoice Invoice Finance and administration Receipt P.O. Purchase P.O. Quote Pricing Receiving desk Sales Request Order

  50. Warehouse Management Shipping desk Shipment Pick Invoice Invoice Finance and administration Receipt Invoice P.O. Purchase P.O. Quote Pricing Receiving desk Sales Request Order

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