Pricing decision-making in a manufacturing organization in Oyo State, Nigeria.

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Department of Business Administration, Ekiti State University, Ado Ekiti, Ekiti State, Nigeria.


Relevant information on cost as input for effective pricing decision making is necessary if organizational goals and objectives are to be attained. The quality of decision taken depends on the strength of the information received especially on pricing decision-making. Hence, this work seeks to establish the necessity of cost information in managerial decision making as it relates to the fixing of selling price of manufactured goods, using a manufacturing pharmaceutical firm located in oyo state as a case study. Secondary data also were collected from the firms' official books on prices for five years (2006-2011). The firm employed total cost plus method to compute the prices of its products. The secondary data also contained the prevailing market prices of the firm's product for the same period (2006-2011). The mean prices of the firm's product and the mean prices of same product by other firms in the open market were statistically analyzed to see whether there is a relationship between them. Results revealed that the prices set by the firm, were within the information on cost from the open market may have influenced the computation of prices set by the pharmaceutical firm examined. Hence, the upward and downward review of prices by the firm is a survival strategy. Consequently, we recommend as a policy option, that firms should embark on adequate data collection as it relates to cost before using them to fix prices of their products.



Pricing, decision making, cost, objectives, Nigeria