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write a few examples of short term decision making in finance?

write a few examples of short term decision making in finance?

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Answer #1

Short-term decisions is usually driven with an objective to maximise limited resources. Few examples of short term decision making in finance are:

  • Products' price reduction to gain customers or market share
  • Product's price reduction to get special orders so that you can utilize your spare / idle capacity and make some incremental cash flows
  • Changing the product mix when there is a capacity contraint
  • Decide to produce an item in house rather than buy from the market
  • Lease a facility to start the production and set the ball rolling rather than wait for external funding to buy the facility
  • Discontinue certain product lines to free up certain capacity that can be deployed to produce more profitable products
  • Undertaking replacement projects
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