Commodities Benefits, Commodities Risks
A Company should allot considerable amount of its capital in order to assure its employees and its customers with the safety of handling its products. But there should be a proper allocation in order that their assets are also protected. Commonly, companies should at least meet the given safety standards of the government but they could also conduct a private research to avoid future difficulties with regards to safety. Managers should do the task of allotting the right amount for the safety procedures in order that they could still maximize their desired profits.
‘Safe enough’ is commonly justified by meeting the maximum allowable parts per piece of regulated substance used for manufacturing. But this ‘Safe enough’ status is not as safe as having zero content for this regulated substance. Government’s safety standards usually change through time because of further studies that usually makes these standards to become tighter. If a sufficient number of a certain kind of product, say for example a toy with a lead content, was proven to have exceeded maximum allowable parts per piece of a regulated substance, all released product of this kind is subject to market recall.
The prevention cost pertains on how would the design for the toy would come up to meet their target costumers while meeting the standards. The toy’s size, paint, and composition are among of the factors considered for the prevention cost. The appraisal cost pertains to the activities designed to find quality problems such as product inspections and any type of testing while the internal and external failure costs are the costs of discovering defects of the product before and after its market release respectively.
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External defects are harder to control since the company’s image is at stake once it occurs. It is ideal to allot most of the money to the prevention, then next to the appraisal, next is internal and then lastly is to the external cost. Inspection is one method of testing but it would mean a great lost to production if almost all of the products manufactured would undergo into it. Product samples would be a great help. Its number is statistically determined by allotting a considerable confidence interval that would lead to a conclusion with a known estimate for possible errors.
Inspection could be done in the appraisal and in the internal cost wherein the company could do the inspection task themselves or to make the inspection more credible they can hire professionals who would do the job independent to the company. Company should improve their whole line of products before they would totally lose their market share. The trust of the people is hard to regain once it is lost. Milk and other dairy products, vegetables and fruits that requires pesticides, and the whole processed foods industry.
Like in the toy industry, the government imposes maximum allowable parts per piece of the regulated substance these products have. No Crumbs for Christmas Cordless vacuum is now gathering a wide share for the market of vacuum industry. This is the current innovation thus different vacuum manufacturing companies race each other for the development of this industry. Being left out would be such great lost for a company and this would permit his competitor to be the consumers’ choice.
Improving the quality of their offered product is one good way so as consumers would continually decide whether one such supplier is better from another supplier. As long as consumers can afford to buy a product on such given price, it is common for consumers to buy something that catches their eyes. External feature is the first factor that they would consider. But the real test is when the product is in use. The customers should have an equal satisfaction with the products functionality because this would drive consumers to refer their procured product to their friends and relatives.
Suppliers should balance their resources in improving both their products’ internal and the external features so as they can have a continuous strong hold of their market. In the photo slideshow of the five products for this particular industry, none of them had completely achieved the critic’s choice because he had given corresponding disadvantages if such customer chooses that product. The Shark and the ReadiVac 14. 4-volt cordless Hand Vac suit for low cost in regards to initial technology investment and in steady-state production.
The Black & Decker 18 Volt and the Dirt Devil Kurv belong to the middle while the Dyson DC16 Root 6 is for the high. The retail cost for each product is justifiable as long as it is the real manufacturing cost added with a justifiable preferred profit but such amount cost that is considerably far from the common price could give such other meaning to consumers. Dyson DC16 Root 6 should prove that it is worthy to buy for that such great price.