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Topic: Business
Number of pages / Number of words: 2 / 503
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For example the pricing of the ‘desktop delivery’ service currently is inadequate to meet its actual costs and needs to be taken care of through an appropriate pricing mechanism.

? Since DOP did not actually break down costs in order to arrive at a more accurate pricing schedule but instead relied only on a universal 15% markup over the basic material costs, the company had absolutely no way of being able to identify where the cost inefficiencies were present in its operations...


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The existing pricing system which was being used by DOP was meant for a company having homogenous products, large direct (fixed) costs, few data collection techniques and low overhead costs. By contrast, DOP exhibits a highly diversified product/service mix as evidenced by its’ employment of both commercial delivery methods and its new customized individually oriented ‘desktop delivery’ model which is accompanied by high overhead costs as compared to the fixed labor costs, a large amount of data with countless ways to analyze it, and considerable non-product, indirect, or hidden costs affecting overall pricing, costs and net expenditure...


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