How do firms decide whether it makes sense to grant credit to a customer?

-

How do firms decide whether it makes sense to grant credit to a customer?



Answer: CREDIT POLICY refers to the decision to extend credit to a customer. The job of the credit manager is not to minimize the number of bad debts; it is to maximize profits. This means that you weigh the odds that the customer will pay, providing you with a profit, against the odds that the customer will default, resulting in a loss. Remember not to be too short-sighted when reckoning the expected profit. It is often worth accepting the marginal applicant is there is a chance the applicant might become a regular and reliable customer.

Comments

Post a Comment

Popular posts from this blog

Agile Method Advantages and Disadvantages

-
Agile Method Advantages and Disadvantages Agile, or adaptive, methods are very flexible and efficient in dealing with change. They are popular because they stress team interaction and reflect a set of community-based values. Also, frequent deliverables constantly validate the project and reduce risk. However, some potential problems exist. For example, team members need a high level of technical and interpersonal skills. Also, a lack of structure and documentation can introduce risk factors. Finally, the overall project may be subject to significant change in scope as user requirements continue to evolve during the project.
Read more

Summarize effective communication strategies in organizational hierarchies, and review the role and relevance of the organizational grapevine

-
Summarize effective communication strategies in organizational hierarchies, and review the role and relevance of the organizational grapevine Some companies try to encourage communication through workspace design, as well as through Web-based communication channels. some executives also meet directly with employees, such as through management by walking around (MBWA) and town hall meetings, to facilitate communication across the organization. In any organization, employees rely on the grapevine, particularly during times of uncertainty. The grapevine is an unstructured and informal network founded on social relationships rather than organizational charts or job descriptions. Although early research identified several unique features of the grapevine, some of these features may be changing as the Internet plays an increasing role in grapevine communication.
Read more

Examine the collapse of Han. What factors explain how this occurred? How influential in Han Dynasty on Chinese History?

-
Examine the collapse of Han. What factors explain how this occurred? How influential in Han Dynasty on Chinese History? Answer: Hsiung Nu (aka Xiongnu) was a threat to the north, Wu had to build the Great Wall to protect empire. Han empire had to give a lot of supplies to Hsiung Nu in order to keep land unharmed. The government allied with wealthy land owners. Peasants had increasing economic pressure, which fueled the Yellow Turban rebellion. Generals stopped recognizing emperor as they became more powerful. Dynasty divided into three kingdoms (Wei, Wu, and Shu). After the Han dynasty, Confucianism became irrelevant, but Daoism and Buddhism were still popular. Han empire invented earthquake devise and anesthesia.
Read more