Sustainability, Satisficing, Profit Maximisation, Wealth Maximisation, Revenue Maximisation

459 Words2 Pages
Write an essay that has the all of the following words/phrases in it (max of 500 words): Revenue maximisation, Profit maximisation, Wealth maximisation, Constraints Theory, Satisficing and Sustainability. Constraints theory refers that profit is not the most important objective of the business, but the need to satisfy the customer. For example, there are a few incidents of Samsung phone exploding. Therefore, the manager of Samsung spent more money on Research and Development to prevent this incident from occurring again. This has lead to a fall in profit of the company. This decision is taken based on the constraints theory as profit is not the most important issue, as incidents of phone exploding may lead to the company shutting down. Thus it is wiser for the company to focus more on the issue and solving it in order for the company to have a higher sustainability. Revenue maximisation means that the business tends to maximise the revenue in order to increase its market share. For example, a hotel manager tries his best to satisfy the customer without considering about the high cost spent. This may leads to high sales revenue and high prestige, but a low profitability. Thus, revenue maximisation may have a low sustainability as the profit may be low. In this case, managers usually benefit personally because of the prestige of running a successful company. Profit maximisation means output level that returns the greatest profit. For example, a cake seller sells his cakes at a high price but uses cheap and low quality ingredients. Even though he may obtain a high profit, the company may not have a high sustainability. This is because the customers will not be willing to visit again. Moreover, shareholders will not necessary invest in the company even if the company shows a high profit. Profit satisficing is the decision to achieve a simply satisfactory profit for
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