companies complain of rising world oil, which will indirectly affect the cost of production and higher selling prices. Even if the selling price fixed, meaning thin profit margins, even if the company is not careful in the calculations, can be said to lose. Condition that forces management to think hard to survive. If the price is raised, it does not compete with other competitors and if it is not raised then the company will lose money.
How appropriate action to address this kind of problem? One is the continuous cost reduction just as discussed earlier. Continuous improvement efforts will greatly help to reduce the company’s losses. Any quality improvement efforts will eliminate or reduce the waste that exists in the relevant industry system, so the price per unit will automatically be reduced.