Glossary - Agribusiness Management - page 438

price inelastic One of the three levels of price elasticity of demand; price elasticity of
demand in absolute terms is less than 1.0; or a change in price has a relatively small
impact on quantity demanded.
principal The initial sum of money invested or borrowed; the portion of the original loan
that has yet to be repaid.
principles Ideas, values, philosophies, and beliefs regarding an issue or issues.
pro forma fi nancial statements Projected fi nancial statements for some specifi ed time

period in the future.
procedure A step-by-step guide to performing a specifi c activity or function.
process design Selecting the specifi c inputs, operations, and methods that are to be used
to produce the good or service.
process layout In production planning, an arrangement in which all like functions are
grouped in the same place.
p roduct advertising Advertising designed to promote a specifi c product, service, or
idea.
product layout In production planning, an arrangement that involves a step-by-step
sequence of functions as the product is assembled.
product life cycles The predictable way in which sales and profi ts of a product unfold as
a product is introduced, sales grow rapidly, the market matures, and the product ulti-
mately declines in the market place.
product mix The breadth, depth, and combination of products, services, and information
offered to the market.
p roduct-driven philosophy A marketing approach based on offering a unique product that
satisfi es a specifi c customer need; creating a product that is so good customers will seek
it out.
production agriculture The farms and ranches that produce the crop and livestock prod-
ucts that provide inputs to the food and fi ber sector.
production agriculture sector The sector of the food production and marketing system in
which purchased inputs, natural resources, and managerial talent come together to pro-
duce crop and livestock products.
production control All activities related to controlling raw materials inventory, providing
detailed production scheduling information, controlling work-in-process inventory,
communicating changes to master production scheduling and purchasing, and control-
ling fi nished goods inventory.
production planning An important aspect of operations management; includes a
wide range of decisions and activities including devising a quality program; locating a
plant; choosing the appropriate level of capacity; designing the layout of the operation;
deciding on the process design; and specifying job tasks and responsibilities.
productivity See output-input ratio .
p rofi t A general term for the difference between total revenue and total cost.
profi t and loss statement See income statement .
profi tability ratios A class of fi nancial ratios that measure a fi rm's profi tability.
program evaluation review technique (PERT) An approach to project manage-
ment developed by the U.S. Navy; involves a diagrammatic representation of a network
of activities and a search for the most sensitive or restrictive steps in the
network.
promissory note A promise by a borrower to repay a lender a specifi c sum of money,
loaned at a specifi c rate of interest for a specifi ed period of time.