Cost – Price – Value
Welcome back readers, Today I am writing about three terms which rules the profitability of each business rather each transaction. Cost – Facts / reality It is the amount paid to acquire, produce or maintain anything, the point to note is “amount paid”, once the payment is done it becomes a fact. Even in complex scenarios like production the facts/costs can be ascertained, of course it may include setting up a complex process to accurately ascertain the exact and complete costs, but certainly it is possible. As most of you must be aware that costs have its own behavior , costs may be fully controllable, partially controllable or not controllable at all, some are apparent, some may not be visible easily and so on. When we refer to controllable costs, it is obvious it can be controlled before actually transacting. Once the transaction happens, it becomes fact/reality. Price – Negotiation It is the amount paid to acquire, produce or maintain anything. You would say, this is exac...