However, what would happen if all payers for a particular provider set reimbursement rates based on marginal costs? If such a situation occurred, the organization would not recover its total costs and would ultimately fail. For prices to be equitable, all payers should pay their fair share in covering providers’ total costs. Furthermore, if marginal cost pricing should be adopted, which payer(s) should receive its benefits by being charged lower prices? Should it be the government because it is
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Margin ([Total revenue-Total variable cost]/Number of units) | 1.67 | 1.57 | 1.03 | 1.81 | 1.81 | - | Profit ([Unit Contribution Margin*No of units] – total fixed cost) | -$26,642 | -$23,586 | -$24,441 | -$13,619 | -$3,738 | - | Net Profit Margin (Net Profit/Total Revenue) | -7% | -11% | -18% | -7% | -6% | - | Market Share | 18% | 11% | 7% | 9% | 3% | 52% | According to the CVP analysis, profit can be calculated by multiplying unit contribution margin and number of units minus total fixed costs
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Prior Year Data Aggregate Motor 15 Motor 10 Motor 5 Sales at capacity (units) 300,000 Actual volume (units) 250,000 120,000 80,000 50,000 Price per unit $113.60 $140.00 $120.00 $40.00 Total revenue $28,400,000 $16,800,000 $9,600,000 $2,000,000 Variable cost per unit $85.60 $125.00 $62.50 $28.00 Total variable cost $21,400,000 $15,000,000 $5,000,000 $1,400,000 Fixed costs $6,000,000 $900,000 $4,500,000 $600,000 Operating profit $1,000,000 $900,000 $100,000 $0 Ratios: Variable cost
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Table of content | | Smartphone market of AR…………………………………………….. | 2 | Memo question…………………………………………………………. | 4 | Discussion……………………………………………………………….. | 4 | Calculations……………………………………………………………... | 5 | Pricing strategies……………………………………………………….. | 6 | Reference……………………………………………………………….. | 8 | Smartphone market of Azerbaijan Republic There are three main categories of mobile phones: simple phones (low-cost devices providing basic function of a phone and address book, feature phones
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Chapter 5 Pricing strategies LEARNING OBJECTIVES After reading this chapter you will: n n appreciate the strategic significance of pricing decisions in marketing strategy understand the approaches to pricing of the economist and accountant, together with their contributions and limitations in the context of the price setting process n apply a framework to pricing decisions based around the key inputs to these decisions n understand the main pricing methods and their relative advantages and disadvantages
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variable costs, and total fixed costs are known and constant. 4. In CVP analysis, the number of output units is the only revenue driver. Answer: True Difficulty: 2 Objective: 1 Terms to Learn: cost-volume-profit (CVP) analysis, revenue driver 5. Many companies find even the simplest CVP analysis helps with strategic and long-range planning. Answer: True Difficulty: 1 Objective: 1 Terms to Learn: cost-volume-profit (CVP) analysis 6. In CVP analysis, total costs can be
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Financial forecasts As part of your plan you will need to provide a set of financial projections which translate what you've said about your business into numbers. You will need to look carefully at: how much capital you need if you are seeking external funding the security you can offer lenders how you plan to repay any borrowings sources of revenue and income You may also want to include your personal finances as part of the plan at this stage. 1 Financial planning
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| $7896 | $7584 | $8664 | Corporate Services | $15,424 | $15,359 | $15,236 | Sales Promotions | $7,909 | $7,039 | $8,083 | TOTAL VC | $32,775 | $31,467 | $33,680 | FixedExpenses | January | February | March | Space Costs | $9,240 | $9,240 | $9,240 | Equipment Costs | $126,580 | $126,580 | $126,580 | Salaries | $53,800 | $53,800 | 53,800 | TOTAL FC | $189,620 | $189,620 | $189,620 | 2) Cost per Revenue Hour for Variable Expenses: Revenue Hours> | January329 | February316
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Case study on Albatross Anchor MT435 Operations Manageme 11/27/12 Introduction Albatross Anchor is a small family owned business located in Small Ville, MA. Albatross Anchor is located on 12 acres of land. They started out with four employees in 1976 and grow over the years to over 100. The company manufactures two types of anchors in different sizes. The types are the mushroom/bell anchor and the snap hook anchor. Albatross Anchor has many manufacturing problems
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CAPACITY PLANNING Prof. Shiv K. Tripathi CAPACITY PLANNING Capacity The upper limit or ceiling on the load that an operating unit can handle Capacity needs include Equipment Space Employee skills STRATEGIC CAPACITY PLANNING Goal To achieve a match between the long-term supply capabilities of an organization and the predicted level of long-run demand Overcapacity operating costs that are too high Undercapacity strained resources and possible loss
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