Saturday, March 10, 2012

In response to Chris Morin
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?  

Tuesday, March 6, 2012

Advertising Ethics


Coke and Pepsi are both in the process of changing their soft drinks.  This is all due the possible cancer link in the caramel coloring that they put in their soda.  There has been research shown on mice that 4-methylimidazole has been known to cause cancer.  This has not been proved on humans, and quite frankly if it wasn’t for the state of California we probably wouldn’t have ever heard anything about it.  California has added 4-methylimidazole to their list of carcinogens, or cancer causing items.   As a result all Coke and Pepsi products that are brown in color would have to have a cancer warning label on it to be sold in the State of California. 
Although the American Beverage Association (ABA) stated they can’t find a link between the dye and cancer both Coca-Cola and Pepsi are removing it from their products.  They both claim it isn’t because of the potential of causing cancer, but rather the marketing headache it would wreak if they had to put a cancer warning on something consumers drink.  Remembering back to Coca-Cola’s extremely failed new coke taste last century both companies are promising there won’t be any change in the taste.
California is making these companies change their product because ti could be unhealthy.  Is it the companies responsibility to be proactive and change their product before there is a huge issue?  What would the damage be financially and psychologically to the companies if their products were proven to help cause cancer?  If it isn’t just an ethical responsibility to change, maybe it is in their best interest financially to try to make their product healthy for the consumers, to avoid issues in the long run.