Activity 1 – P5
Every business has one goal, to maximize its profit, this therefore can be done by analyzing the demand of consumers, providing appropriate supply, along with maintaining quality of goods and services. However, there are many factors that affect this simple operation. Owing to these economic elements, the sales, prodcution, and procurement of a business get adversely impacted.
These factors include: * Demand and Supply * Rate of interest * Globalisation * Competitive pressures
The factors I have chosen to write about is Demand and Supply and Globalisation. The term ‘demand’ is used to describe the quantity of a good or service that consumers will buy at a particular price. Consumers will buy more of the same product when it is cheaper than when it is more expensive. The demand can be affected by a few factors like: affordability, level of income etc. The ‘supply’ of a product is the quantity that a supplier is willing to provide at different prices. Typically suppliers will supply more at a higher price rather than a lower price. Therefore when the demand increases, then businesses will usually try to supply more. The ease with which they can increase supply depends on: availability of raw materials and labour, logisitcs. The demand and supply are two principle factors that affect the working of any business model. The demand is the will and ability of consumers to purchase a particular commodity, whule supply is the ability of the business to provide for the demand of consumers. Suppose, a mobile phone infused with the latest technology is introduced in the market, it will have a higher price because of its demand in the market. Its prices therefore will continue to