PKSC 4300: Econ 6 Exam
1. What are the inputs to deciding price of a package?: 1) cost of material
2) package's target profitability
3) competitive pricing
4) capacity utilization
5) customer accommodation
6) smoke and mirrors
2. Describe the cost input to package price: Converters will not sell less then their cost as it
represents a direct investment into making the product
3. Describe the package's target profitability input to package price: Money a business
wants make because you have to pay a bank or parent company back with what you sell
4. Describe the competitive pricing input to package price: Sales representatives are
usually competitive and will fight for business and fall into an auction mentality to see a competitor suffer
5. Describe the capacity utilization input to package price: If a machine or plant is below
some nominal capacity usage, a converter may price below the target profitability to break even
6. What is an important factor about capacity utilization?: The plant must be profitable to
do this
1. What are the inputs to deciding price of a package?: 1) cost of material
2) package's target profitability
3) competitive pricing
4) capacity utilization
5) customer accommodation
6) smoke and mirrors
2. Describe the cost input to package price: Converters will not sell less then their cost as it
represents a direct investment into making the product
3. Describe the package's target profitability input to package price: Money a business
wants make because you have to pay a bank or parent company back with what you sell
4. Describe the competitive pricing input to package price: Sales representatives are
usually competitive and will fight for business and fall into an auction mentality to see a competitor suffer
5. Describe the capacity utilization input to package price: If a machine or plant is below
some nominal capacity usage, a converter may price below the target profitability to break even
6. What is an important factor about capacity utilization?: The plant must be profitable to
do this
