Reference no: EM13363658

End-of-period push" and channel-stuffing

Such demand phenomena as the "end-of-period push" and channel-stuffing:

a. are highly unusual cases that rarely need to be considered by demand forecasters.

b. take place mainly in services, rather than goods production and distrubution

c. occur widely but generally have minor effects and may safely be omitted from demand forecasting

d. Often have large enough effects that they should be allowed for in demand forecasting.

I believe the answer is B or D not sure

Definition:

A deceptive business practice used by a company to inflate its sales and earnings figures by deliberately sending retailers along its distribution channel more products than they are able to sell to the public. By channel stuffing, distributors temporarily beef up their accounts receivables. However, unable to sell the excess products, retailers will send the excess items instead of cash back to the distributor, who must readjust its accounts receivable and ultimately its bottom line. In other words, stuffing always catches up with the company, because it cannot maintain sales at the rate it is stuffing. This is usually done fraudulently to raise the value of the stock. Channel stuffing is illegal. Here, a manufacturer makes a large shipment to a distributor at the end of a quarter and records the shipment as sales; however, the distributor has the right to return any unsold merchandise. Because the goods can be returned and are not guaranteed as a sale, the manufacturer should keep the products classified as a type of inventory until the distributor has sold the product.