Ethics and “Price Gouging” in Florida

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2/26/2011 CASE ASSIGNMENT 2 Ethics and “Price Gouging” in Florida i) Many months before the “Hurricane Season”, our company will negotiate contracts with suppliers in order to make sure that we have higher inventory levels during the “Hurricane Season” to be able to supply the possible high demand for commodities. This situation will increase our inventory cost during the hurricane season and at the end average total cost. We are taking risk of a higher cost to be able to supply possible high demand occurs before and after a possible hurricane or storm and increase our profit by the help of low cost according to our rivals. Normally we could choose not to have high inventory and be able to supply these goods from neighbor states…show more content…
Store layout will be reconfigured to place the items that sell more frequently in the entrance and provide specials for perishable items in order to increase inventory turnover on these items, which will be the most affected by the sudden drop in demand when the situation clears. a) Winner: * Customers: They will be able to get their supplies at a lower cost. b) Looser: * Retailer: They are taking the risk of extra inventory cost. They should gain more if they were allowed to increase prices. iv) It is the time for increasing prices because the demand will be at its peak point. Now people will not be looking for the low price. They will just want to be able to get their needs. They will be willing to pay any price because they are needy for food, water, fuel etc… If the Florida Law did not exist then we should increase prices to gain more profit. Florida Law prevents us increasing the price but it does not mention about charging people for service. We can’t increase the price but instead we can charge for the service we provide. Our company will have shuttles for the people affected by the hurricane to increase sales and profit. We will charge people for this service. We will have a truck with inventory of main commodities circling the hurricane area. There will be a charge for this delivery also. a) Winner: * Costumer: They will be able to get their supplies at a lower cost if they go to store by

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