Investopedia

Continue to Site »

Basing Point

Filed Under »
Dictionary Says

Definition of 'Basing Point'

A specific location used in the basing point pricing system. Usually, the basing point is where the manufacturing of a product or production of a commodity takes place. Once set, the manufacturer will quote the base price plus a set shipping cost from that location, regardless of where the actual goods are shipped from.
Investopedia Says

Investopedia explains 'Basing Point'

The basing point can be used when determining the base price of a commodity. For example, if the base point is Chicago, then a shipment within Chicago will cost the base price, and a shipment outside Chicago will cost the base price plus the set shipping rate to the specific zone. In this way, prices can be set when buying or selling a particular commodity in a different location.

Economists have long argued that setting the price this way actually sets up a cartel, and so the practice has encountered some resistance, mostly in the form of discouraging the setting up of manufacturing plants away from the basing point.

Articles Of Interest

  1.

    Detecting Accounting Manipulation

    "One-time charges" and "investment gains" are two strategies companies can use to distort their numbers.

  2. A Look At Accounting Careers

    More than just crunching numbers, this career blends detective work with trouble shooting.

  3. Putting Management Under The Microscope

    We tell you where to find the telltale signs of corporate misdeeds.

  4. Playing The Sleuth In A Scandal Stock

    Learn the legwork involved in finding out whether your investment can weather a storm.

  5. Financial History: The Evolution Of Accounting

    Follow accounting from its roots in ancient times to the profession we now depend on.

  6. Advanced Financial Statement Analysis

    Learn what it means to do your homework on a company's performance and reporting practices before investing.

  7. What is a monopoly?

    Monopoly is a fun family game, but in real life, a monopoly can be dangerous to a country's economy. A monopoly occurs when an industry or sector has only one producer of goods or retailer for ...

  8. Weighted Average Cost Of Capital (WACC)

    Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality

  9. Capital Expenditures (CAPEX)

    Learn more about what it costs to produce goods.

  10. Working Capital

    Working capital is one of the basic metrics used to evaluate a company's financial health. Find out what it can tell you about a stock and learn how to calculate it.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  2. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  3. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  4. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  5. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  6. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.
Trading Center