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The zone pricing reduces the phantom freight, yet keeps the pricing structure relatively simple, thus making it easier for the seller to compete in a faraway market. [2] The definition of zones is sometimes done by drawing concentric circles on a map with the plant or warehouse at the center and each circle defining the boundary of a price zone.
A freight rate (historically and in ship chartering simply freight [1]) is a price at which a certain cargo is delivered from one point to another. The price depends on the form of the cargo, the mode of transport ( truck , ship , train , aircraft ), the weight of the cargo, and the distance to the delivery destination.
Total absorption costing (TAC) is a method of Accounting cost which entails the full cost of manufacturing or providing a service. TAC includes not just the costs of materials and labour, but also of all manufacturing overheads (whether ‘fixed’ or ‘variable’).
Base point pricing is the system of firms setting prices of their goods based on a base cost plus transportation costs to a given market. [1] Although some consider this a form of collusion between the selling firms (it lowers the ability of buying firms to gain a competitive advantage by location or private transportation), it is common practice in the steel and automotive industries.
Pricing strategies and tactics vary from company to company, and also differ across countries, cultures, industries and over time, with the maturing of industries and markets and changes in wider economic conditions. [2] Pricing strategies determine the price companies set for their products. The price can be set to maximize profitability for ...
Export Parity Price or EPP is defined as, "The price that a producer gets or can expect to get for its product if exported, equal to the Freight on Board price minus the costs of getting the product from the farm or factory to the border.