Assuming the firm you chose in week 1 has diversified into the package delivery business that delivers packages throughout the United States and around the world. Discuss the impact of seasonal variations in your firm's delivery business for forecasting financing requirements. Discuss the various sources of short-term and long-term financing of your new package delivery business. How would you differentiate your firm from the competition?
Impact of seasonal variation are:
1. Low order volumes which would lower the working capital and also the profits, due to absorption of high fixed costs.
2. High demands of customers during the peak time, would increase fixed and variable costs.
2. Various sources of financing are:
Short-term finances; commercial papers, bank overdraft, Short-term loans from bank, unsecured short term loans from others.
Long term financing: equity issues, debenture issues, long term loans from banks.
3. To differentiate the firm from others one of the two approach needs to be followed: a. Price discrimination by lowering the prices from the competitors.
B. Product differentiation that is providing timely orders quickly as compared to others
Get Answers For Free
Most questions answered within 1 hours.