Profit seeking

Part of the apparent paradox stems from the industry s awkward position on the spectrum from publicly owned enterprise and pure private, investor-owned, and profit-driven enterprise. On the one hand, the pharmaceutical companies are structured as profit-seeking enterprises. Unlike many other profit-seeking industries, however, the research-based pharmaceutical industry cannot survive without government protection. 

For example, if the preferred list of drugs used by the plan (called the formulary) does not include a desired drug, participants pay the full cost. More generally, critics say that the reliance on profit-seeking insurance companies and Medicare Advantage HMOs rather than on direct government payments raises costs to elderly consumers. 

To establish a framework for supply chain intermediary analysis, we focus on the economic incentives of three types of players suppliers, buyers, and intermediaries. All players are self interested, profit seeking, and risk neutral. In the simplest form, each supplier has an opportunity cost s, each buyer has a willingness to pay level v that could be public or private information depending on the model assumptions. The intermediary offers an asked price w to the supplier and a bid price p to the buyer while creating a non-negative bid-ask spread p — w) to support her operation. The intermediary has the authority to determine whether a particular trade is to take place using control p. Adopting some mechanism T P,p, w), the intermediary optimizes her own profit. 

The successful sale of recycled plastics requires familiarity with the concept of profit gap analysis, profit planning and new product development as three interlinked stages which ensure that requisite corporate profitability is attained. Modern marketing philosophy cites profit-seeking activity as opposed to sales volume activity as the distinguishing feature. 

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