negative aspect of selecting unit volume as a pricing objective is that
A) production often cannot keep up with demand.
B) there are increased carrying costs with extensive inventories.
C) if price reductions are used to achieve volume objectives, it can sometimes come at the expense of profits.
D) it can create competition between divisions within the organization itself causing conflicts over the allocation of resources.
E) it always positively correlates with a sales revenue objective.

Question

Quizplus · Accepted Answer

If price reductions are used to achieve volume objectives, it can sometimes come at the expense of profits. When a company emphasizes unit volume, it may need to lower prices to sell more units, which can lead to lower profit margins. This can be a significant negative aspect of using unit volume as a pricing objective.

Negative Aspect of Selecting Unit Volume as a Pricing Objective