Demand selling

The market demands, selling prices, and transfer prices are independent of the structure of the facility network. 

The 1990 price of anhydrous HCl was about 330/t the 1993 price of 20° Bh (31.4% HCl) was about 73/t (77). Prices depend on plant location, transportation burden, and on-site demand. These factors all influence the selling price significantly, sometimes carrying zero or negative value. 

The demand for DRI varies depending on local market conditions. In industrialized countries, DRI primarily is used as a supplement to scrap for controlling residual elements in electric arc furnace steelmaking. In regions where scrap is scarce, DRI is used as a replacement in production of all grades of steel. In 1993, Latin America produced 9.4 X 10 t (39.3%) of the world s DRI. Middle East/North Africa produced 6.1 X 10 t (25.6%), Asia/Oceania produced 4.4 X 10 t (18.4%), and CIS/Eastem Europe produced 1.7 x 10 t (7.1%). North America produced 1.2 x 10 t (5.0%) Africa, 0.9 x 10 t (3.8%) and Western Europe, 0.2 x 10 t (0.8%) (1). Nearly 79% of the DRI produced is consumed in steel mills adjacent to the DR plants called captive plants. Plants which are designed to sell and ship DRI on the open market are called merchant plants. 

Whereas the manufacturing cost is strongly influenced by energy prices, cost of money, and capital investment, ammonia selling prices are usually deterrnined by supply and demand. Therefore, the profitabiUty of ammonia plants is deterrnined by the margin between cost of production and ammonia price. 

Strong growth in demand during the period 1985—95 from existing and new appHcations led to firm pricing and expansion of world capacity. Total world demand in 1995 was estimated to be approximately 60,000 metric tons. Balance of capacity and demand at that time resulted in a selling price of 16.00/kg. More recently (ca 1997), prices have dropped to less than 10/kg. 

Syrup Mixing and Handling. Most parent companies sell concentrated flavor bases to franchise bottlers and allow the bottlers to mix this with their own sweetener and water. This defrays shipping costs and reduces the labor demand on parent company manufacturing. In return, franchise bothers are able to purchase sweeteners from local suppHers at a substantial discount and reduce their overall costs. 

According to one estimate (73), the current capacity for manufacturing dimer acids in the U.S. is around 55,000 t per year. Current demand is estimated at about 33,600 t per year, and is expected to grow at about 2—3% per year to 35,000 t in 1993. The historical growth rate for dimer acids (1980—1989) was 0.8% per year. Prices of tall oil fatty acids, the raw material for over 90% of dimers, currently fluctuates in the 0.55—0.66 per kg range. The dimer acids themselves are presently selling at about 1.10 per kg for the standard 75—80% dimer acids, and about 2.20 per kg for the distilled (90—95%) dimer acids. 

The bottoms liquid from any gas plant may be sold as a mixed product. This is common for small, isolated plants where there is insufficient local demand. The mixed product is transported by truck, rail, barge or pipeline to a central location for further processing. Often it is more economical to separate the liquid into its various components and sell it as... 

Another U.S. policy to attain energy independence was to force all Alaskan North Slope crude oil to he consumed inside the United States and not be allowed to he exported. The problem was that North Slope crude oil is relatively heavy and not suitable for west coast fuel needs. The mismatch of supply and demand caused California refineries to sell heavy distillate fuels abroad and import lighter fuel additives. Furthermore, the forced selling of Alaska crude oil on a very saturated west coast market caused Alaska crude prices to he 1 to 5 per barrel less than the international price, resulting in less oil exploration and development in Alaska. The upshot of all this was lower tax revenue, a loss of jobs in the oil fields, and less oil exploration and development on the North Slope. The United States actually exported heavy bunker fuel oil at a loss, as opposed to the profit that could have been attained by simply exporting crude oil directly. 

Businesses, operating in a market economy, have little incentive to implement demand management strategics on their own. They pay for the costs of shipment delays associated with moving goods and services to the marketplace (these costs are incorporated into the selling price of the goods and semces). 

The production volume of propylene tracks that of ethylene because they are simultaneously produced in the same plants. Usually, propylene sells for a somewhat lower price than ethylene, but this occasionally varies when derivative demands change. Prices for both stay relatively constant in the 25-30 cent/lb. range. 

These three steps all produce significant amounts of waste. First, as discussed earlier, the nitration process results in the production of spent sulfuric acid. In the past the company had been able to sell much of this material to the coke and steel industries but declining demand meant that the acid now required disposing of, at additional cost. At the time green catalytic nitration technology was becoming available with clay, zeolite and lanthanide catalysts all providing possible alternatives to the use of sulfuric acid (see below). Improved selectivity to the desired para-isomer is an added benefit of some of these catalytic systems. However on the... 

The influence of RP on selling prices depends on the monopsony power of the buyer, the price elasticity of the product and the cross-price elasticity for substitute products, and also the coverage of products under RP. The situation most likely to result in equivalence between RP and price-cap regulation is when there is a majority buyer, the number of products under RP is very large and demand is very elastic. In general, the RP system attains its objectives best when the pharmaceutical bill has a close relationship with price pressure and when price differentials in the market for equivalent products are high, which has clear links with the presence of generics. 

Suppose you are a chemical distributor who wishes to optimize the inventory of a specialty chemical. You expect to sell Q barrels of this chemical over a given year at a fixed price with demand spread evenly over the year. If Q = 100,000 barrels (units) per year, you must decide on a production schedule. Unsold production is kept in inventory. To determine the optimal production schedule you must quantify those aspects of the problem that are important from a cost viewpoint [Baumol (1972)]. 

There are three main consequences of this separation of purchase from sale. The first is a critique of Ricardo s assertion that no man produces but with a view to consume or sell (Ricardo 1951 290 see Kenway 1980 28). Instead of a separation of purchase from sale, Ricardo assumes each individual is simultaneously a producer and consumer, deciding what to produce and consume in the same breath. This is Say s Law, that supply creates its own demand. Marx was very scathing about Say s Law, viewing it as childish babble and a cosy description of bourgeois conditions (Marx 1969b 502-3). From a class-based perspective, there is a demarcation between the production decisions of a small number of capitalists and the consumption decisions of the population as a whole. 

More circling is involved in the consideration of money. There is a problem of establishing where the money comes from to back up the aggregate demand. Luxemburg considers Marx s example of capitalists A, that produce a surplus product of capital goods, and capitalists B, that consume this surplus product. The problem is that to get the money to purchase from the A s, the B s must also sell their surplus products. But who could have bought their surplus product It is obvious that the difficulty is simply shifted from the As to B s without having been mastered (ibid. 143). 

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