WAEC 2024 Economics · Question 45
Warehousing of goods in the process of distribution is the function of
Options
- A.Supermarkets
- B.departmental stores
- C.retailers
- D.wholesalers
Answer: D. wholesalers
Explanation written with AI and checked against the answer key
Step 1: Analyze the question The question asks which middleman in the chain of distribution is mainly responsible for warehousing (storing goods in bulk) before the goods reach consumers.
Step 2: Explain the concept The channel of distribution usually runs like this:
Manufacturer → Wholesaler → Retailer → Consumer
- Wholesalers buy goods in large quantities from producers, store them in warehouses, and sell in smaller bulk quantities to retailers. Their key functions include: • Warehousing (storing goods until retailers need them) • Breaking bulk • Granting credit to retailers • Giving market information to producers and retailers • Bearing risks such as price changes, spoilage and theft
- Retailers (including supermarkets and departmental stores) are the final link. They sell small quantities directly to consumers. They keep only limited stock in their shops, so storage is not their main role.
Step 3: Solve by eliminating options
- A. Supermarkets: These are large self-service retail shops that sell directly to consumers. Eliminated.
- B. Departmental stores: These are large retail shops with different departments under one roof, also selling to final consumers. Eliminated.
- C. Retailers: They sell to consumers and hold only small stock. Warehousing is not their primary function. Eliminated.
- D. Wholesalers: They store goods in bulk in warehouses as a core function between producers and retailers. Correct.
Step 4: Answer The correct option is D. wholesalers.
Exam tip: Link the words "Wholesaler = Warehouse" (both start with "Wh"). Also remember that wholesalers break bulk for retailers, while retailers sell in small units to consumers. If a question mentions storing, bulk, or credit to retailers, think wholesaler.
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