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As companies grow their sales revenues over the years, they have to make more purchases and expenses. Buying more raw materials and/or products not only increases inventory costs but also begins to strain the company’s existing infrastructure (systems). In such cases, company managers are obliged to take financial support and make necessary improvements.
This adds additional costs to the company. Of course, additional costs increase production/supply prices. Finally, since the product/goods cost increases, they have to increase their sales prices. As it is known, global prices dominate the markets. For this reason, it is not possible to reflect the desired profitability in the prices.