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8 Theories Of Business Cycles | Causes of Business Cycles

Several theories were offered to explain the causes of business cycles. The following are some of them 1. Climatic theory: This theory was stated by Prof. W. S. Jeveons. According to him, sun spots appear on the face of the sun. This affects rainfalls. As a result, agricultural production will suffer. Income of the agriculturists will fall. This fall in agricultural production will affect the demand for industrial goods. Thus, changes in climate are responsible for business cycles. 2. Psychological theory : This was stated by Prof. Pigou. According to …

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Importance Of Separation Of Fixed And Variable Expenses

It is necessary for an organization to segregate and focus on its Fixed and Variable expenses. If this task or action is taken lightly then the organization has to suffer from many decision making problems like Break-even Analysis (Cost-Volume-Profit Analysis), Gross Margin Analysis or Contribution Margin Analysis. Although above three terms are interrelated, they have their different uses in different business decision making situations. But if Fixed and Variable expenses are not identified or separated in the organization, solution to these interrelated terms will be impossible. Do we know how …

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10 Important Functions Of Wholesalers In Channel Of Distribution

Wholesale includes the sale and all activities directly incident to the products or services to those who are buying for purposes of resale or for business use. If the products or services are sold to the consumers, it can not be called wholesaling. Wholesaling includes sales of any firm to any customer except an ultimate consumer who is buying for personal, non-business use. The Functions Of A Wholesaler are given below: The Different Functions Of A Wholesaler (1) Buying : Wholesalers act as purchasing agents for their customers whether they …

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Features Of Continuous Production System

Continuous or Flow Production:  According to Buffa, “Continuous flow production situations are those where the facilities are standardized as to production routing and flow since inputs are standardized. Therefore, a standard set of processes and sequences of process can be adopted”. Thus, continuous or flow production denotes the production of big quantities of a single or at most a very few varieties of products with a standard set of processes and sequences.There are some distinct Features Of Continuous Production System which we will discuss. The processing is done through a …

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Risk Bearing Functions Of A Wholesaler

(7) Risk-Bearing: The wholesaler makes it possible for the retailer to carry a smaller stock by holding goods in readiness near the retailer and by offering prompt delivery. This reduces the risk with price changes. The wholesalers usually guarantee the merchandise they sell and the retailer can get immediate satisfaction on claims involving faulty or defective merchandise. A wholesaler reduces a manufacturer’s risk by buying ahead. By storing goods the wholesaler reduces the producers’ risk from price changes, fashion shifts and physical deterioration. If the product deteriorates, goes out of …

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Functions of Wholesalers : Transportation

 (4) Transportation : The wholesaler decreases the cost of transportation by buying in larger lots than is possible by the average retailer. A wholesaler furnishes other transportation services to his customers. The wholesaler assembles goods from a large number of scattered manufacturers and makes it accessible to the retailer. Thus quicker delivery is secured. Thus the retailers and industrial users need not carry large inventories. Consequently the costs are reduced because their investments in inventory, insurance and storage costs are lower. For the retailer, there is less risk- that the …

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Features Or Characteristics Of Specialty Goods

Specialty goods are those consumer’s goods on which a significant group of buyers are habitually willing to make a special purchasing effort. Specialty goods are those consumer goods with unique characteristics and brand identification for which certain significant buyers are habitually willing to make a special purchasing effort. These goods have a particular attraction for the consumer and out of this attraction he goes out of his way to purchase them. The special purchasing effort that the consumer is willing to make is merely to locate the product or brand …

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What Are Specialty Goods With Examples

Specialty goods are those consumer’s goods on which a significant group of buyers are habitually willing to make a special purchasing effort. Holton defined specialty goods as those convenience or shopping goods which have such a limited market as to require the consumer to make a special effort to purchase them. David J. Luck criticized the Holton’s definition.  He objected to the abandonment of the willingness of consumers to make a special effort to buy as the rationale for the concept of specialty goods. He regarded this type of consumer …

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What Are Shopping Goods With Examples

Shopping goods are those consumer goods which the customer  in the process or selection and purchase characteristically compares on such bases as suitability, quality, price and styles. Shopping goods may be considered to be those commodities whose selection is of such importance that buyers devote considerable time to their selection. Such products are purchased only after a comparison of several products. Quality, style, suitability and price are the common bases of comparison. Shopping goods have also been defined as those goods for which the probable gain from making price and …

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What Are Convenience Goods And Their Examples

Convenience Goods Definition: Convenience goods are those consumer goods which the customer usually purchases frequently, immediately and with the minimum of effort in comparison and buying.These are the goods which the consumer desires to purchase with the minimum of effort at the most convenient and accessible store. In other words, the convenience goods may be defined as those goods for which the probable gain from making price and quality comparisons is thought to be small relative to the consumers’ appraisal of searching costs in terms of time, money and effort. …

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