Optimal pricing for a target profit : Case study on a veterinary diagnostic laboratory

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Original languageEnglish
Pages (from-to)77-86
Journal / PublicationInternational Journal of Production Economics
Issue number1
Publication statusPublished - 5 Jan 1998
Externally publishedYes


When social sector is with an intention of meeting a target level of profits instead of simply aiming for zero profit or maximizing the profit, a proper pricing policy needs to be set up. At present time, a Veterinary Diagnostic Laboratory performs a large number of test on various animal tissues and has never had the appropriate prices for changing these expensive tests. This study presents a model to optimally pricing for firms such as the laboratory with a target profit motive instead of the normally expected maximum profit objective. We make suggestions for the laboratory on the basis of the results obtained and a sensitivity analysis. This model can also help other similar social organizations to define their pricing strategy.

Research Area(s)

  • Pricing, Target profit, Veterinary