50 
THE MODEL STOCK PLAN 
out so rapidly that they make way for fresh, new merchandise 
by the time it is in demand. Under the Model Stock Plan 
this can be done with much less loss and often with net profits. 
The management has an important share in making the 
Model Stock yield the greatest total profit. Under the 
Model Stock Plan, for the first time under any method of 
merchandising, we have at hand a real measure of how large 
a stock investment should be and how large the publicity 
appropriation should be. By the usual practices, these 
figures are shrewd rule-of-thumb guesses based on successful 
retail experience. By the Model Stock Plan we are definitely 
shown the amounts we must employ. 
The Model Stock Plan will not call for an investment larger 
than the smallest sum that will give a stock complete enough to 
bring greater total profits than can be obtained either from a 
larger stock or from a smaller stock. If, as may or may not 
happen in any single instance, the figures according to the 
Model Stock Plan accurately set call upon the management 
to appropriate larger sums, the management will be glad of 
the opportunity. For it knows definitely that these will force 
a much larger business and a much greater total profit. 
A manufacturer producing goods at bulk-demand price 
levels can meet and beat competition only if his volume of 
business is large enough so that the total cost plus overhead 
per unit is as small as or smaller than that of his competitors. 
What is true of mass production is equally true of mass dis- 
tribution. In the distribution of the articles made by mass 
production, the retail business eventually goes to those stores 
which buy in large enough quantities so that their manu- 
facturers can produce large enough lots to insure low over- 
head charges per unit. 
In planning ahead we shall find it most profitable to think 
of our planning as divided into three parts. And while we 
realize, of course, that the further ahead we can plan accu- 
rately on facts or on reasonable thinking, the better off we 
are, still we must avoid one danger. In any such planning 
there is always a possibility that the day by day needs may 
not be adequately visualized.