How do you want to handle the expiring batch of product?

Quality Assurance

Over-the-counter medicines are required by law to show the date through which the

manufacturer guarantees full potency. Many distributors will not accept delivery of product that

is within a year of its e

xpiration date. A batch of Allround is within six months of expiration, and

you need to decide what to do with it. One option is to ship the product and hope that distributors

do not return it. If they do, you will need to ship new product and dispose of the returns. In

addition to the cost, the returns could strain your relationship with the distributors. Another

option is to dispose of the whole batch up front at a cost of $100,000 and avoid the appearance

of trying to dump old product on your distributor

s. Finally, you could sell the inventory to a jobber

who has a more flexible policy on expiration dates, but they are offering to buy it below cost, so

there will be a net charge to you of $50,000. How do you want to handle the expiring batch of

product?

One option is to ship the product and hope that distributors do not return it. If they do,

you will need to ship new product and dispose of the returns. In addition to the cost, the

returns could strain your relationship with the distributors.

Another option is to dispose of the whole batch up front at a cost of $100,000 and avoid

the appearance of trying to dump old product on your distributors.

Finally, you could sell the inventory to a jobber who has a more flexible policy on expiration

dates, but the

y are offering to buy it below cost, so there will be a net charge to you of

$50,000