PRICING
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Pricing and Economies of Scale Most supply chain
activities display economies of scale. Changeovers make small
production runs more expensive per unit than large
production runs.
Everyday Low Pricing Versus High-Low Pricing A
firm such as Costco practices everyday low pricing at its
warehouse stores, keeping prices steady over time.
Fixed Price Versus Menu Pricing A firm must decide
whether it will charge a fixed price for its supply chain
activities or have a menu with prices that vary with some
other attribute, such as the response time or location of
delivery.