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Heidi has a small farm that has a variety of animals, including chickens - HSC - SSCE Business Studies - Question 15 - 2022 - Paper 1

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Heidi has a small farm that has a variety of animals, including chickens. She would like to sell the excess chicken eggs to customers. Which distribution method wou... show full transcript

Worked Solution & Example Answer:Heidi has a small farm that has a variety of animals, including chickens - HSC - SSCE Business Studies - Question 15 - 2022 - Paper 1

Step 1

Which distribution method would best support her situation?

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Answer

To determine the best distribution method for Heidi to sell her excess chicken eggs, we should consider the following options:

  1. Producer ➔ consumer: This method allows Heidi to sell directly to the end customer, ensuring that she gets the maximum profit without any intermediaries. This is often the most effective method for small-scale producers looking to sell directly to their customers.

  2. Producer ➔ retailer ➔ consumer: In this method, Heidi would sell her eggs to a retailer who would then sell to consumers. While this method could increase her reach, it reduces her profit margin since the retailer takes a cut.

  3. Producer ➔ wholesaler ➔ consumer: Selling to a wholesaler would further reduce Heidi's profit margin. Wholesalers typically buy in bulk and sell to retailers or direct to consumers, meaning Heidi may earn less per egg.

  4. Producer ➔ agent ➔ retailer ➔ consumer: This is the most complex distribution channel, involving multiple parties which could complicate sales and reduce profit margins even further.

Given these options, A. Producer ➔ consumer would be the best support for her situation, as it maximizes her profit by eliminating intermediaries.

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