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Price and Product-Mix Decisions Under Different Cost Systems

Price and Product-Mix Decisions Under Different Cost Systems

Brand
Springer Nature
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N/A
Part Number
0
GTIN
9783658193218
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New
Product Description

Philipp Plank analyses the question, what drives the quality of cost-systems and is the quality of cost-systems directly and at best positively related to the firms performance. In other words, is it worth investing in complex cost allocation systems or are there environmental and/or production settings in which less enhanced systems perform adequately. Using simulations, a benchmark firm (first-best solution) perfectly allocating cost to products is compared to firms implementing heuristic cost-allocation schemes (second-best solution) to identify the profit gap resulting from decisions based on limited information. Into this discussion, the idea of cost-stickiness is integrated, thereby indicating a new planning approach.

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