Price method

Pros and Cons of Inventory Valuation In the standard-price method of inventoiy valuation, all materials are taken out at the same... 

The revealed preference method is an indirect approach that is used in order to monetize use values. This method observes the real choice between money and the environmental goods. Methods often include observations of consumers or producers behaviour or actions, such as the hedonic price method and the production function method. The hedonic price method determines values from actual market transactions. These transactions are used to see how the price of a market commodity varies when a related environmental good changes, such as the effects of noise or air pollution on house prices. The production function method is used to estimate the value of the environmental effects on production. This method is suitable when consumption or production of a private good is affected by the environmental good. An example is the valuation of ground-level ozone levels by valuing the impact on the production of wheat or timber, which has market prices. The problem with the revealed preference method is that it does not contain all the individuals values that affect the WTP. 

Another method used at times is the Standard price method. This method presents environmental values as corresponding to the mitigation costs needed to avoid environmental degradation. The main disadvantage of this method is that the environmental value derived is poorly linked with the environmental impact. 

For further details on transfer pricing refer to Feinschreiber and Kent (2003), Choi et al. (2002, pp. 491-505) or Abdallah (1989). Feinschreiber (2004) provides details on the different transfer pricing methods and Feinschreiber (2000) discusses transfer pricing regulations of more than 40 countries. 

Feinschreiber R (2004) Transfer pricing methods. John Wiley Sons, Hoboken, N.J. 

The cost of purchased equipment is the basis of several predesign methods for estimating capital investment. Sources of equipment prices, methods of adjusting equipment prices for capacity, and methods of estimating auxiliary process equipment are therefore essential to the estimator in making reliable cost... 

Another approach used in economic valuation is the hedonic pricing method. By this approach, economic valuation is obtained through estimating the direct effect of environmental impacts on market prices, usually housing prices. The hedonic pricing method is often used to estimate the economic value of more intangible damages due to air pollution, such as reduced visibility and aesthetics. 

Study of pricing methods. Hearings, Eightieth Congress, 1948. 

In this thesis we derived new methods for the pricing of fixed income derivatives, especially for zero-coupon bond options (caps/floor) and coupon bond options (swaptions). These options are the most widely traded interest rate derivatives. In general caps/floors can be seen as a portfolio of zero-coupon bond options, whereas a swaption effectively equals an option on a coupon bond (see chapter (2)). The market of these LIBOR-based interest rate derivatives is tremendous (more than 10 trillion USD in notional value) and therefore accurate and efficient pricing methods are of enormous practical importance. 

Realizing the shortcomings in the enthalpy-based method, Kenney (1984) proposed to value steam based on the potential work that the steam possesses in comparison with enthalpy. Kenney pointed out that the enthalpy-based pricing method is based on the first law of thermodynamics (energy conservation), while the work-based pricing is based on the second law of thermodynamics (entropy). In thermodynamics, potential work is also termed as availability (a) implying the amount of potential work available. 

Clearly, the steam prices show greater disparity compared with that of the enthalpy-based method (Table 17.3). The enthalpy-based steam pricing method... 

TABLE 17.3. Comparison Between Enthalpy and Work-Based Steam Pricing Methods... 

Both enthalpy and work-based steam pricing methods rely on thermodynamic laws as the basis. Cooper (1989) argued that the steam pricing should reflect economic reality. Since the operating cost for a steam system mainly consists of fuel burned for steam generation. Cooper (1989) proposed to use the concept of fuel equivalent (FE) as the basis for steam pricing. In this method, the ratio of FE for steam at different pressures is used to derive the steam prices in placement of the ratios of enthalpy and availability. 

The critical question for enthalpy-based, work-based, and FE-based stem pricing methods is Do the steam prices from these methods reflect the true costs The question can be answered the best with the following example. 

For tackling this challenge, the method based on marginal analysis can indicate true steam costs at point of use. The reason why the marginal price method (Chapter 17) can provide the true steam cost is that it is based on the last incremental amount of steam saved or generated. Determination of marginal steam prices relies on an overall steam and power balance model, which takes into account the effects from steam balances. 

As was previously noted, statistics comparable to those shown in Table 11.6 were discussed with an operations executive whose degree is in finance. This conversation was highly instructive, particularly with respect to unit-pricing methods and break-even charts and why the computations to determine the additional sales necessary to cover... 

Pigmentation techniques are now becoming more sophisticated. So far, dyeing systems for PP have been very expensive nevertheless modest successes have been attained with nickel and metallic dyes despite their considerable cost. At present, spin-dyeing remains the only reasonably priced method. When spun-dyed fibers are used, the colors do not fade. 

Dynamic pricing methods can be categorized into two groups posted price and price discovery. Posted prices are determined by the seller and hence not flexible. However, they could be dynamic in the sense that the seller could change posted prices periodically depending on demand, supply availability, and the time of sale. In price discovery mechanisms, prices are determined through a bidding process such as auction. Customers on sites such as eBay have the option of buy it now based on posted prices or make a bid to purchase in an auction. 

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