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THE RIGHT EQUATION

Created by : Brigadier (Retd) Sunil Chadha,, Nil  | 01 10 2012 15:38:43 +0000
Keywords : profits
Activity:  569 views;  last activity : 01 11 2012 07:55:02 +0000

During school in our arithmetic classes we were taught that:-

“SELLING PRICE = COST PRICE + PROFIT”

None of probably realized then, the inherent arrogance of the statement. Also, there was an element of finality in the thought. 

Do we need to now say that:-

“PROFIT  = SELLING PRICE - COST PRICE”

And accept its relatively greater ambiguity ??

Which of the two scools of thought do you subscribe to ? and why ?

  
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SELLING PRICE = COST PRICE + PROFIT Vs PROFIT = SELLING PRICE - COST PRICE
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Approach is the only difference, ultimate result would be the same anyway. In the changed scenario customer is said to be the "king". How much he is getting benefited again different question. In the monopoly market the producer had the upper hand. Days have gone for such scenario. There are number of players in the market today in contrast to the scenario of two decades ago. Technology is available to everyone. So, there is no technological advance for any player. Service is the only difference. So the customer came into the scenario and his tastes, interests, views, opinions are being valued now. This aptly applies for manufacturing industry where the players are biggies. When it comes to agriculture sector, the producer has no power in his hand. He is totally dependent the policies of the Govt. particularly in the Indian scenario. Middleman is eating out the benefits of both the producer and the consumer. Producer not able to market his produce since the facilities available to him are meager. He is not able to invest his time and money on marketing. This situation is providing platform for the middleman to fill the vacuum. This scenario need to be changed. It seems I am deviating from the subject of discussion. In my view, the difference is only the approach.
By Srinivas suravajhala, Asst. Manager.  | 01 11 2012 09:49:19 +0000
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For obvious reasons
By Firdaus Jahan, Manager - Business Development & Market Research, Doosan  | 01 11 2012 04:26:43 +0000
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None. In today's scenario, potato farmers sell their potatoes @ 30 paise per kg. We buy @ Rs.10/- kg. The one who produces is deprived of profits and he is selling at the cost price. Even if he keeps his produce in nearby Cold Storage (for which Government offers subsidy to the extent of 75% to the persons who have disposable money to set up cold storage), he pays to the tune of Rs.1 to 3 per kg as a fee for keeping his produce in the cold storage. Neither the producer nor the buyer gets any benefit in the process. Profitability is meant for middle men, transporters, and the local vendors! The one who toils to get the output is totally deprived! The purchase rate is determined based on the supply and demand position, and not in consonance with his expenditure and toil.
By S. Muralidharan, Executive Director, Knowledge Foundation & Campus Around the Corner  | 01 10 2012 16:12:07 +0000
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i once read somewhere that "you could buy a ford car in any color as long as it was black"!! the days of arrogance are long gone. besides, the recent economic downtrend ought to have forced us to re-think. if for no other reason, i personally support choice B for the flexibility it inherently provides us. 
By Brigadier (Retd) Sunil Chadha,, Nil  | 01 10 2012 15:38:43 +0000
Argue for "SELLING PRICE = COST PRICE + PROFIT"
Argue for "PROFIT = SELLING PRICE - COST PRICE"
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