The model stock plan

Bibliographic data

Monograph

Identifikator:: 1820833348

URN:: urn:nbn:de:zbw-retromon-210730

Document type:: Monograph

Author:: Filene, Edward A. http://d-nb.info/gnd/123562244

Title:: The model stock plan

Place of publication:: New York

Publisher:: McGraw-Hill Book Company

Year of publication:: 1930

Scope:: xiv, 253 Seiten

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter I. The way to greater total profits

Collection:: Economics Books

[2 THE MODEL STOCK PLAN cent to the intrinsic value of the products. To me, it seems clear that distribution cost should be less, much less, than the initial production cost.! Imagine that we buy at a poultry farm a freshly dressed chicken for 75 cents and require that it be sent home for us. “Give me another dollar for delivery charges,” the farmer says. In this instance, the cost may possibly be justified. This proportion of 75 cents for intrinsic value—production cost—and $1 for distribution cost is typical of what we have in merchandise distribution today. The condition is no less real where the consumer, buying something else in ordinary channels of distribution, pays the whole $1.75 at one time and has no definite facts about what proportions of the total price are, respectively, production cost and distribution cost. It is in reducing these distribution wastes that we are primarily interested. As we reduce them, we increase the buying power of our customers. Thereby we increase our volume of sales. Thus we increase our total profits and add greatly to the security of our business against competitive inroads. Lower and lower prices, down to the lowest practical limit, with all waste eliminated, resulting in greater and greater sales; this is our way to greatest total profits. Mass produc- tion has accombplished much toward its realization in the 1 If we set about looking for exceptions, we can easily enough find some. [n New England, for example, or in Minnesota and the Dakotas, coal must be shipped in from considerable distances. At the mine mouth, coal costs comparatively little. The cost of physically moving a ton of coal several hundred miles by rail or water is great because of its bulk. The cost of truck- ing it from the railside or waterside yard to a householder’s coal bin is neces- sarily great. Itis comprehensible, then, that coalin his basement should cost 1 Boston householder far more than twice its cost at the mine mouth. The same thing, due to perishability and unavoidable losses in shipping and handling, is true of highly perishable fruits such as, perhaps, winter straw- berries grown in Florida and sold in Chicago. But, despite a great number of exceptions that might be cited, the general statement is true that distribution costs should be less than production costs. I believe that at least 85 per cent of the goods on which life and material happiness depend, the articles that require the greater share of consumers’ incomes, the things that make pros- perity possible and keep our people at work are subject to an enormous drain of avoidable waste. And these wastes, by curtailing the average customer’s consumption, are a real obstacle to a still greater national prosperity that is perfectly attainable and far beyond anything that our, or any other, people has ever enjoved.

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