Effect Of External Factors In Decision Making Process

Contents

Introduction2.
1. Supply and petition3.
2. rising prices3.
3. Taxation4.
4. supplant rate5.
5. Interest rate5.
6. giving medication policy6.
7. result8.
8. reference9.

Introduction

This assignment is about how external economic factors rouse rival internal giving medication decision making process. away factors are the factors that beyond the control of the organisation, and internal factors refer to the factors that organisation eject change or reallocate internally.
In this assignment, the author entirely chose 6 most popular external factors that depart affect the internal origin. These factors are: 1. supply and demand; 2. Inflation; 3. Taxation; 4. Exchange rate; 5. Interest rate; 6. Government policy. In this context, the writer mainly illustrated how these external factors will affect business in terms of revenue/sales, profitability, and various business strategies within the organisation.

1.Supply and demand
In economics, the Demand is defined as the quantity of good that people are ready to purchase at various prices within some given clip periods . In other words, it comprises both people willing to profane and the ability of buying.
The demand of the harvest-feasts at various prices can straightaway affect organisations’ revenue.



Thus, organisations must carefully look into the demand out front their planning of the supply of their products. According to the law of demand, the demand of a product decreases when the price of the product increases. After estimating the demand of their product at various price levels, a company can choose a price to fulfil their target revenue. If a change piece of prices can lead a great change percentage of demand, a company can simply reduce the price of their product to reach higher revenue. The revenue is maximised when the change of percentage of demand equal to the change of percentage of price. (i.e. when the price elasticity of demand is -1.)
Although companies can affect the demand of their...If you want to get a full essay, order it on our website: Orderessay



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