0109

Problem

Evaluate this statement: “The demand for major equipment (a foundation good) is likely to be less responsive to shifts in price than that for materials, supplies, and components.” Do you agree or disagree? Support your position.

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Step 1/2

Industrial goods:

The industrial goods that are part of the finished product are termed as ‘existing goods’ that includes raw materials, manufactured materials and parts. The initial capital items that include installation and accessory equipment are termed as ‘foundation goods’. The suppliers and services which involve in organizational operations rather than becoming a part of finished product are termed as ‘facilitating goods’.

Step 2/2

I disagree with the statement that “foundation goods are likely to be less responsive than that for entering or facilitating goods” as on the following reasons:

• The company in the contemporary business era could not survive the competition without installation of proper manufacturing process and fixed equipment

• High end equipment’s and sophisticated computer technology could draft the programs for business operations

• Land and building assists in expanding business operations enormously and maximizes profits

• Accessory equipment includes personal computers, portable drills and other primary machines, which are necessary for daily workers at plant as well as in the office

• These goods are only subject to commencement of the operational process