Alex’s new constraint – Demand

Alex’s new constraint – Demand

B: Increase market demand
D: accept orders 10% below cost
A: Increase profit
C-D':Assumption(s)Injection(s)
1. Accepting orders 10% below cost would cause price warsAdding another competitive advantage with the reduced cost could avoid a price war.
C: avoid price wars
D': Not accept orders 10% below cost

In order to Increase profit I must Increase market demand and in order to Increase market demand I must accept orders 10% below cost. But, in order to Increase profit I must also avoid price wars and in order to avoid price wars I must Not accept orders 10% below cost. I can't both accept orders 10% below cost and Not accept orders 10% below cost.

RelationAssumption(s)Injection(s)
D-D'Both decisions/actions are mutally exclusive.
B-Daccepting orders 10% below cost will increase market's demand for our products. There are other actions to increase market demand like offering faster shipping times.
C-D'1. Accepting orders 10% below cost would cause price warsAdding another competitive advantage with the reduced cost could avoid a price war.
A-B1. Market demand is a constraint
2. Market demand will increase profits
A-C1. A price war would cause loss of market share
2. A price war would cause a decrease in profits