Book contents
- Frontmatter
- Contents
- List of figures
- Introduction
- Acknowledgements
- Part 1 A dream of future wealth
- Part 2 The hidden art of management
- 13 The sweet spot
- 14 Elastic bands
- 15 An offer you can't refuse
- 16 The best of both worlds
- 17 Financial Perestroika on Interstate 95
- 18 Loads of money
- 19 Checkmate
- 20 Acts of God
- 21 Acts of men
- 22 Hubble, bubble, double-entry trouble
- 23 Credit crunch conclusion
- 24 Twenty-first-century accounting
- Appendix 1 Mathematical anchor
- Appendix 2 Getting to grips with cash
- Postscript
- Bibliography
- Index
13 - The sweet spot
from Part 2 - The hidden art of management
Published online by Cambridge University Press: 05 June 2014
- Frontmatter
- Contents
- List of figures
- Introduction
- Acknowledgements
- Part 1 A dream of future wealth
- Part 2 The hidden art of management
- 13 The sweet spot
- 14 Elastic bands
- 15 An offer you can't refuse
- 16 The best of both worlds
- 17 Financial Perestroika on Interstate 95
- 18 Loads of money
- 19 Checkmate
- 20 Acts of God
- 21 Acts of men
- 22 Hubble, bubble, double-entry trouble
- 23 Credit crunch conclusion
- 24 Twenty-first-century accounting
- Appendix 1 Mathematical anchor
- Appendix 2 Getting to grips with cash
- Postscript
- Bibliography
- Index
Summary
The term originally referred to various pieces of sporting equipment, notably cricket and baseball bats and tennis racquets. When hitting the ball, the bat (for instance) will rebound, but there is a location along the bat where this force is completely balanced out by the turning force of the bat. If the ball is hit closer to the end of the bat, the grip of the bat will try to rotate forward out of the batter's hands, whereas if the batter hits it closer to the handle, the bat's tip will try to rotate forward. There is a small ‘sweet spot’ where these two tendencies cancel out. The ‘sweet spot’ location on a given baseball bat varies however it is approximately 6½” from the end of the barrel.
WikipediaIn this chapter we are going to use simulation models as we did in Part 1, but there is a major difference in the way in which you will be taking business decisions. You will recall my caveat at the end of Chapter 10.
Finally, while you have been playing with this simulation you will undoubtedly have noticed that it contains some attractive but most improbable simplifications. For example, you are permitted to set a price mark-up as high as you like (by setting your own gross profit margin), while at the same time you can also set your sales revenues to whatever value you want. So there doesn't seem to be any connection in this model between setting a higher price and suffering from a consequent drop in sales volume.
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- Information
- Financial Management for BusinessCracking the Hidden Code, pp. 85 - 92Publisher: Cambridge University PressPrint publication year: 2010