Willingness to Pay
A company’s success is determined by its ability to combine all factors of production to enhance its ability to increase revenue. For this to occur, the business must ensure that they promote their products to the consumer. An essential part of this promotion involves supply chain management (Tait, Rutherford, Saunders, & Guenther, 2017). Several adjustments must be made to ensure that the business utilizes all methods and means in the supply chain to increase the consumers’ willingness to buy. These methodologies. Some of the methods include price shifts, free deliveries, and improvement in the quality of the products Don't use plagiarised sources.Get your custom essay just from $11/page
Reduction in prices increases the consumer willingness to pay. This scenario arises due to the increase in the amount for goods a consumer is willing to purchase (Brusset, 2015). Thus, a focus on the price of the final products in the supply chain will enhance the consumer willingness to pay. Secondly, distribution plays a critical role in supply chain management. Influencing distribution through a reduction in the cost of delivery will improve the consumer willingness to pay (Tait, Rutherford, Saunders, & Guenther, 2017). This situation arises through promotions such as free delivery and subsidized divert. If there is a reduction in the cost of delivery, a consumer may be willing to purchase the products at the market price.
The most important aspect of SCM is ensuring that all factors of production lead to maximum productivity. As a result, slight changes in the SCM may lead to exponential growth or serious damages to an organizations productivity. While businesses should take the necessary precautions to ensure maximum productivity, they should ensure that these mitigative measures to increase the consumers’ willingness to pay do not reduce the productivity or profitability of an institution. Such measures include a reduction in the cost of distribution and a modification in the prices of the final products.
References
Brusset, X. (2015). Estimating the supply chain efficiency loss when the seller has to estimate the buyer’s willingness to pay. EDP Sciences, ROADEF, 48(4), 477-496. Retrieved from https://doi.org/10.1051/ro/2014018
Tait, P., Rutherford, P., Saunders, C., & Guenther, M. (2017). Emerging versus developed economy consumer willingness to pay for environmentally sustainable food production: a choice experiment approach comparing Indian, Chinese and United Kingdom consumers. Journal of Cleaner Production, 124(15), 65-72. doi:https://doi.org/10.1016/j.jclepro.2016.02.088