Case Problem 2 Quality Foods, Inc. operates a chain of twenty large super- to ease the shortage of working capital. Both concern markets in the suburbs of a large midwestern city. The owners nonfood merchandise, a source of considerable profit are young, talented, and aggressive. Thanks to their operating to the company. ability, they have been successful, and the rate of expansion The suggestions are as follows: has been better than originally anticipated. If anything, they have 1. Use traditional wholesalers for nonfood merchandise. grown too quickly. While more conservative management would 2. Use rack jobbers for these merchandise classifications. have waited until enough profits had accumulated to finance expansion, Quality Foods has opened new units on credit avail- QUESTIONS able because of its success. The cost of building and stocking new units has led to a weak working capital position. 1. List the advantages and disadvantages of using wholesalers. All the departments in the store are owner operated. 2. List the advantages and disadvantages of using rack jobbers. At a recent director's meeting, two suggestions were made 3. What information do you need to make the final decision