Glossary - Agribusiness Management - page 422

c ooperative advertising A common advertising practice in agribusiness in which local
advertising is sponsored, and usually funded, jointly by the manufacturer and the local
dealer or distributor.
cooperative borrowing A type of loan made to agribusiness cooperatives from CoBank,
which is part of the Farm Credit System.
corporation A form of legal organization with the powers, rights, and obligations of an
individual; a corporation's assets and liabilities are controlled by the legal entity, not by
the owners (stockholders).
cost-based pricing A pricing method based on adding a constant margin to the basic cost
of the individual product or service.
cost basis of valuation A valuation practice by which assets are recorded on accounting
records at their acquisition price, not their current market value.
cost leadership One of two generic business strategies; involves meeting competitors' prod-
uct offerings with an offering of comparable quality and features, but beating the com-
petitor on price.
cost of capital The rate of return a fi rm requires of its investments.
cost of goods sold The total cost to the business of goods that were actually sold during a
specifi ed time period; includes such items as raw material costs, in-coming freight costs,
and the cost of any damaged or lost goods that must be absorbed.
cost-plus pricing See cost-based pricing .
critical path method (CPM) A method of scheduling that involves a diagrammatic repre-
sentation of the network of activities which comprise a production operation.
cross price elasticity of demand A measure of the relative responsiveness of
quantity demanded of a given commodity to changes in the price of a related
commodity.
CTO (contribution-to-overhead) pricing A pricing strategy for encouraging extra sales
by selling additional product above and beyond some base sales projection, at a price
slightly greater than the additional out-of-pocket costs of handling the product.
culture The set of socially transmitted behaviors, arts, beliefs, speech, and all other prod-
ucts of human work and thought that characterize a particular population.
current assets An accounting term designating actual cash or assets that are expected to
be converted to cash during one normal operating cycle of the business, typically one
year.
current liabilities An accounting term designating those outsiders' claims to a business
that must be paid within one normal operating cycle, usually one year.
current ratio A fi nancial ratio measuring liquidity; total current assets divided by total
current liabilities.
custom hiring A form of leasing that combines labor services with the use of the asset
being leased.
customer service Activities between the buyer and seller that enhance or facilitate the sale
of the seller's products or services.
customers Those who purchase outputs (products, services, and or information) from a

fi rm.
cycle inventory An inventory quantity that is tied to truck capacity, pallet size, manufac-
turer promotion, or some other factor that increases inventory levels relative to a normal
pipeline inventory; also called lot-size inventory.
cycle-time-to-market The time required for a supplier to complete a single cycle, begin-
ning with receipt of an order and ending with the fulfi llment of the order; reducing