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Difficulty: EasyWholesale Trade and Functions of Wholesalers

A commercial intermediary purchases large consignments of packaged goods directly from a manufacturing firm and re-sells them in smaller units to neighbourhood shopkeepers. Which function of the wholesaler is primarily demonstrated in this scenario?

  1. Breaking bulkAnswer
  2. B
    Financing production for the manufacturer
  3. C
    Issuing debit notes to correct invoice undercharges
  4. D
    Providing direct services to ultimate consumers

Answer

The correct answer is breaking bulk, as it describes the process of dividing large quantities of goods bought from producers into smaller packages required by retailers.
Breaking bulk is the primary function where a wholesaler buys in large quantities from producers and splits the goods into smaller quantities to match the purchasing capacity and stock requirements of retailers.

Step-by-Step Solution

1
Identify the action described in the scenario
The intermediary purchases large factory consignments and splits them into smaller lots for shopkeepers.
Retailers usually do not have the capital or storage capacity to purchase directly from manufacturers in huge quantities.
2
Match the identified action to the correct wholesale trade function
Dividing large consignments into smaller units for retail sale is defined as breaking bulk.
This function directly connects the production scale of manufacturers with the retail needs of shopkeepers.

Key Concept

Breaking Bulk in Wholesale Trade
Estimated Time:45s
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Topics

Wholesale Trade and Functions of Wholesalers

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