Anyshade manufactures a range of paints. It uses flow production. The Finance manager has produced a cash
flow forecast as the business wants to arrange an overdraft with its bank. The Finance manager believes that
reducing prices is the best way to increase sales revenue. Anyshade’s paints are well known for quality.
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15: Anyshade’s Finance manager believes that reducing prices is the best way to increase sales revenue. Do you
agree? Justify your answer.[6]
Possible KN Points:
>Low prices could make Anyshade more competitive.
>Competitors reaction might lead to a price war which could result in fewer sales.
>Price might not be reason why buy.
>The business does not know why people buy paint.