In: Accounting
Because fruits and vegetables are perishable, ordering too many or too less can really hurt the business with unnecessary cost (think inventory management). In your opinion would you rather order to much, or to less? Which cost do you feel is better of a business to "eat" if that situation presents itself?
Perishable fruits and vegetables are considered to used in a
limited time otherwise they would be of no use.
The term perishable here means that something that gets rotten
after a limited period of time.
Now, because fruits and vegetables are perishable, ordering too many or too less can really hurt the business with unnecessary cost (thinking of inventory management) as sometimes the demand gets lowered which results in less consumption of already purchased raw material (here fruits and vegetables).
In such a case, where there are perishable goods to be delt with (here fruits and vegetables) should always be purchased in less quantities as there are huge costs considered with such purchases.
The company can rather have a loss in profits as considered to
loss from raw material spoilage. As the loyal customers would be
always loyal and can wait for supply, and this
cost (raw material costs) is better for a business to "eat".