EYK12 Masterful Merchandising is a company that specializes

EYK1-2. Masterful Merchandising is a company that specializes in obtaining large quantities of products from multiple manufacturing companies and sells these products to end consumers. Its products include clothing, athletic equipment, electronics, home and kitchen products, groceries, and many other products. It prides itself in being a one-stop-shop where consumers can fill all their shopping needs without having to travel to multiple stores. a. Masterful receives daily shipments of goods from manufacturers to stock its shelves. From a cost perspective, is it cheaper to buy manufactured goods in small or large quantities? What incentives would a manufacturer provide in order to facilitate ordering large quantities? b. Why would a merchandiser choose to operate online instead of through a brick-and-mortar store? Do you think an online presence eliminates the need to have a physical store for con- sumer shopping?

Solution

a. From a cost perspective, it is beneficial to order small quantities of manufactured goods inorder to reduce inventory storage costs. But if small quantities are ordered the order processing cost might get increased because of more number of small order when compared to less number of large orders. The incentives the manufacturer provides may include, bulk discounts when large quantities are ordered.

b. Online store is better in the perspective of shopping from faraway places. People don\'t tend to travel so long places to shop their needs when the same needs are fulfilled by nearby shops. In online shopping, they can shop from their home and they don\'t know from where their products are being delivered. Online presence doesn\'t eliminate the need to have a physical store, physical store is required for storing the inventory and one can operate his business both online and physical to earn more profits.