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What are the advantages and disadvantages of cost based pricing method?
Wiki User
∙ 14y ago
Cost based pricing method does not take into consideration supply/demand, or even market status, it is purely based on the cost of the production of the product dollars per unit of final product (raw materials, manual labour, etc..).
So in one market, (if the product is a necessity) it could be advantageous if the current economical status would normally dictate a drop in prices.
But on the other hand, could be the complete opposite, if the product is undervalued in a hot market.
"An object's value is calculated on how much a
willing buyer would pay a willing seller for it" - Personal Quote.
Wiki User
∙ 14y ago
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