Percentage of Sales Models Usually Assume That Costs, Fixed Assets

question 14

Essay

Percentage of sales models usually assume that costs, fixed assets, and working capital all increase at the same rate as sales. When do you think that these assumptions do not make sense? Would you feel happier using a percentage of sales model for short-term or long-term planning?

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Definitions:

Customized Offers

Tailored promotions or deals created to meet the specific needs or preferences of individual customers or segments.

Production Orientation

A business approach focused on the production process and efficiency, often with less emphasis on marketing or customer needs.

Mid-1920s

A period referring to the middle years of the decade of the 1920s, often associated with significant economic growth and cultural change.

Supply Chain

The network of all the individuals, organizations, resources, activities, and technology involved in the creation and sale of a product, from the delivery of source materials from the supplier to the manufacturer, and eventually to the end user.