economically problem- marks and spencer?

This is my problem- How do i State this problem is an economic one.

All though Marks and Spencer’s have a large variety of products on their shop floor for customers to be able to access easily; once items are not on the shop floor, in most cases the there is no more stock left in the stock room. This results in the customer having to wait for next day delivery, go to next closest branch, or shop online. This can affect the profit in which the company make slightly as customers may be left with choice to find the similar product elsewhere.

How does it effect the economy. i dont know anything about economics

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One Response to “economically problem- marks and spencer?”

  1. Mohammad says:

    1. Let us first understand the meaning of ‘economy’.

    2. Economy of a country is the sum total of all the persons and organisations/institutions working in the country.

    2.1 That is: – You, I, and all the working persons of the country; all the companies, banks, financial institutions, railways, roadways, airways, Governments; and all other organisations/institutions – constitute economy.

    3. So, when we talk about the performance of an economy, we are talking about the combined performance of all of us.

    3.1 If any of the constituent is not working effeciently, it affects the combined performance of the economy.

    4. Now coming to the other part, I will not comment about any specific institution.

    5. I will only say that inventory management is a very important function of a commercial organisation.

    5.1 There should be no under stocking resulting in stock-out situations. Nor should be overstocking. Both under stocking and overstocking have costs.

    5.2 You have already explained the costs of stock-out situation. Yes, it is very costly for an organisation.

    5.3 Similarly, overstocking has costs: interest charges on borrowed funds, insurance premium, rent of premises, costs of personnel managing stores department, etc.

    6. Therefore, a well balanced stock position has to be maintained by a successful organisation.
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