If you were a hardware store owner would you stock heavily before winter started? Or any season or wait for that season to start before you order huge inventories?
As a small (Or large) business owner sales forecasting is one of the hardest challenges. Inventory is a hassle, it costs money, takes up space, and doesn't look good on the financial statements. That being said, when a company orders an extremely large amount of product, they are able to get a better deal than if they only ordered a little bit. Also the earlier in the season the less demand there will be, therefore it will be cheaper.
As a business owner, I would consider what the product is, and how much it changes year to year. In Chris's example snow shovels haven't changed very much year to year.
As a result I would buy a bunch of shovels very early in the season. If I couldn't sell all of them, I would be able to store them for the next year. Although it is expensive to store them I could still make money off them next year.
Many businesses have been accused of raising prices of shovels during snowstorms. This creates an ethical dilemma. Although the supply and demand curves warrant the higher prices, should it be allowed?
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