However, there are disadvantages to Just-in-time stock control. The first method is that it may not come in time, so may be risky. For example, if you’re very close to selling out of Coca Cola, you will re-order a batch of say, 15 bottles. If by any chance these do not arrive on time, may it be due a car accident or by any other means, then the supermarket do not have this product in stock to sell. Therefore, this means reduced profits for the supermarket because they can’t sell the product. Also, true stock may differ because of thefts. For example, when an item is passed through the till, one of those products is deducted from the database. However, if an individual stole 5 tins of beans, the supermarket may think they have 5 tins of beans left, however, as they have all been stolen they can’t sell any of that product. This means that the supermarket now has to go without stocked beans, leading to complaints from customers and a deduction in sales.
Transfer of funds is the transfer of money from a bank account to a company. It is often used in supermarkets when people use their credit card (pay using credit) or debit cards (pay using your own money) to pay for the products they’re purchasing. You can either pay for your product using a chip and pin machine or a magnetic strip. The disadvantage of a chip and pin machine is that it can take longer than using a magnetic strip machine , and the chip can become damaged as they aren’t very durable. However, it is much more secure, as cards have a unique pin number. This is different to a magnetic strip as there are no further security measures.
Online shops can be easily set up by many people. Firstly, the company must register their domain with a search engine, for example, . This makes it easier for people looking for the company to be redirected easily. The second procedure a company can do is pay for an advert. They have two options, the first method is to become partnered with a company, such as “Google Adsense”, and then they place adverts with registered Google Adsense websites. The advantage of this scheme is that your company is advertised on a diverse range of websites. The second option could be to put your advert on a specific website, and make a deal between the two companies. For example, if I were to set up an E-Commerce store online, I could e mail theregulus.co.uk directly and ask them if they could host my advert. However, this means that only people visiting theregulus.co.uk will know about the company im advertising, whilst with schemes such as Google Adsense, your websites is being advertised throughout the internet.
Global positioning systems, often known as GPS, have a profound effect on our life. It can tell us location and time information, regardless of weather effects. It is maintained by the United States government and is freely accessible by anyone with a GPS receiver. Its primary use is to be installed into modern cars, and to give the general public information on how to get to a location. It does this by giving them road instructions, such as, ‘follow the road for 5 miles’ etc.
A speed limiter is a piece of equipment which is installed into cars to limit their top speed. This will reduce deaths caused by speeding drastically, as the operator of the car cannot go above a certain speed. However, this agitates users as they’re being constantly restricted, in their own vehicle. Should companies have the right to restrict users in their own vehicle?
Traffic congestion zones are often used in large built up urban locations. If operators (in vehicles) need to get somewhere, then they can pay a small fee to get past traffic. The impact of this is that users can move past traffic if they’re willing to pay. However, if you’re not willing to pay, you will have to stay in congested traffic.
Data mining is sorting through data to identify patterns and establish relationships. The effect of this in business is that we can spot patterns in sales. This means that business’s can spot trends, to make better informed decisions. For example, if Apple has sold 400,000 more tablets than phones for the last four years, they can predict demand for the new phone they release this year. This will improve cash flow because they can predict demand.
Price comparison sites are brilliant for customers wanting to compare products. For example, if I were to look at car insurance prices, I could compare the same deal with several other companies all from one website. This means that I can conveniently shop around for the cheapest deals. The effect of this on people’s lives is that we can now get the cheapest deals. However, sometimes, companies aren’t registered with them, meaning that you aren’t necessarily always getting the cheapest deal!
Advantages of Online shopping from both the shop owner and customers view points (all advantages):
- Prices are cheaper compared to manual shops. This is because you don’t have to pay for staff (Advantage from customers point of view)
- Quicker receipt of goods purchased. This is quicker than waiting for a cheque to process
- For items costing over £100 the bank shall support you in legal action if a business has stolen your money.
- The company has better cash flow as cash is transferred automatically. (shop owner)
- Low maintenance costs, for example, if you own a shop you have to pay for staff and electricity. (shop owners view point)
- Faster delivery can be offered from companies as cash if transferred so quickly. This leads to higher sales as customers are often unsure about purchasing online as delivery takes so long.
- As payments are so easy to make, customers often regret purchasing items. (Impulse purchases)
- Often people don’t have the internet
- People are often reluctant to use online purchasing as they believe people will steal their money
- There is an erosion of privacy as companies collect information about what they purchase. People often want what they purchase, to be private.
- It is expensive for the company to set up a website as you have to host it and hire a web programmer to build it.
- Customers often have to wait prolonged periods of time until their product arrives.
- Companies have to pay a proportion of sale to companies such as “PayPal”. This is a disadvantage as profits are reduced.
- Often people’s credit cards are stolen and used to purchase goods online. It is the seller of the goods who have to bear the cost of fraudulent sales.
- The companies often need to keep their databases secure. If data is not kept up to date and accurate they can be sued under the data protection act 1998.