Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
10th Edition
ISBN: 9780134181981
Author: Jay Heizer, Barry Render, Chuck Munson
Publisher: PEARSON
Question
Book Icon
Chapter 9, Problem 1ED
Summary Introduction

Summary:

Groceries are looking at attaining maximum payoffs from their layouts. They will have a layout with a shelf place and they charge for that. The charge is known as slotting fee. It is part of the expense of the manufacturer.

Slotting fee will increase the manufacturer’s cost. It is possible that customer might not find their desired local product if slotting fees is permitted.

To determine: How much ethical are slotting fees.

Expert Solution & Answer
Check Mark

Explanation of Solution

Ethical nature of slotting fees:

Slotting fee cannot be termed as unethical because it is a marketing strategy. The manufacturer is paying the retailer additional charge as slotting fee. This will enable the retailer to sell products at a lower cost. Sometimes slotting fees will amount to half the profit of a grocer.

But slotting fees might hinder the smaller companies and their products to get a frontline shelf in the store.  Slotting fees will aid in reinforcing the strength of the major players in the market. It is simply taking advantage of the free market available. Hence, slotting fees cannot be termed as unethical.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
“Implementing a Performance Management Communication Plan at Accounting, Inc.” Evaluate Accounting Inc.’s communication plan.  Specifically, does it answer all of the questions that a good communication plan should answer? Which questions are left unanswered?  How would you provide answers to the unanswered questions? “Implementing an Appeals Process at Accounting, Inc.”   If you were to design an appeals process to handle these complaints well, what would be the appeal process?  Describe the recommended process and why.
The annual demand for water bottles at Mega Stores is 500 units, with an ordering cost of Rs. 200 per order. If the annual inventory holding cost is estimated to be 20%. of unit cost, how frequently should he replenish his stocks? Further, suppose the supplier offers him a discount on bulk ordering as given below. Can the manager reduce his costs by taking advantage of either of these discounts? Recommend the best ordering policy for the store. Order size Unit cost (Rs.) 1 – 49 pcs. 20.00 50 – 149 pcs. 19.50 150 – 299 pcs. 19.00 300 pcs. or more 18.00
Help answer showing level work and formulas
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Text book image
Operations Management
Operations Management
ISBN:9781259667473
Author:William J Stevenson
Publisher:McGraw-Hill Education
Text book image
Operations and Supply Chain Management (Mcgraw-hi...
Operations Management
ISBN:9781259666100
Author:F. Robert Jacobs, Richard B Chase
Publisher:McGraw-Hill Education
Text book image
Business in Action
Operations Management
ISBN:9780135198100
Author:BOVEE
Publisher:PEARSON CO
Text book image
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Text book image
Production and Operations Analysis, Seventh Editi...
Operations Management
ISBN:9781478623069
Author:Steven Nahmias, Tava Lennon Olsen
Publisher:Waveland Press, Inc.