chapter  3
13 Pages

Pricing economics for food processors

The last chapter covered how to optimally manage a food processing plant in order to minimize the cost of producing a set quantity of its product. Now, this chapter covers how the salespeople and ingredient buyers for a food processing plant go about the buying and selling of the ingredients and fi nished products. The basic assumption made in this chapter is that the buyers and sellers are motivated by profi t maximization: they want to buy ingredients for as little as possible and sell the fi nished product for as much as possible so as to maximize the company’s profi ts.