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Difficulty: EasyWholesale Trade and Functions of Wholesalers

Which of the following services is performed by a merchant wholesaler specifically for the benefit of the manufacturer?

  1. A
    Breaking bulk into smaller units for easy purchase
  2. Financing production through prompt and advance paymentsAnswer
  3. C
    Stocking a wide variety of competing products under one roof
  4. D
    Issuing credit notes to rectify overcharges on trade invoices

Answer

Financing production through prompt and advance payments
Wholesalers assist manufacturers by placing large orders and paying promptly or in advance. This steady cash flow enables manufacturers to purchase raw materials and maintain unbroken production cycles.

Step-by-Step Solution

1
Identify the recipient of wholesale functions described in the stem.
The target entity is the manufacturer.
Wholesalers perform distinct sets of functions for manufacturers versus retailers.
2
Distinguish functions performed for producers from those performed for retailers.
Providing working capital through advance payments directly supports the manufacturer's operational costs.
Retailers benefit from functions like breaking bulk and receiving a variety of goods, whereas manufacturers benefit from bulk purchasing and production financing.

Key Concept

Wholesaler Functions to Manufacturers
Estimated Time:45s
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Topics

Wholesale Trade and Functions of Wholesalers

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