"For many years all the stores in our chain have stocked a wide variety of both domestic and imported cheeses. Last year, however, all of the five best-selling cheeses at our newest store were domestic cheddar cheeses from Wisconsin. Furthermore, a recent

While it is true that the survey by Cheeses of the World provides a description for the people’s taste, one must be cautious in recommending methods of maximizing profit based on the newest store’s top 5 seller and how the sales of different product could generate different amount of profit.

The first question that needs to be addressed is how well the five best seller of the newest store can represent the overall sales of cheese throughout all the chained stores. The survey suggests that cheese lovers have an increasing preference for domestic cheese, but it never indicated how many polls were submitted or how well the respondants represent the population of cheese lovers. Moreover, the five best seller at their newest chain store does not provide adequate objectivity in predicting its customer preference. Perhaps the newest store is situated at some isolated town where people have a huge appetite for Wisconsin cheese. Maybe the newest store had not imported all the varieties of cheese and so naturally the only possible best seller is the domestic cheese. While it is true that the new store’s data should be considered, it is insufficient to draw useful conclusion from a single store.

In addition, even if customers are more inclined to purchase domestic cheese, this does not necessarily imply selling domestic cheese exclusively engenders more profit. While it is true that decreasing inventory could lead to higher profit, it does not consider many other factors. For example, maybe imported cheese could be sold at a great marginal profit, while selling domestic cheese generates much less revenue. If the chained cheese store is renowned for the variety it provides, cutting down on imported cheese may very well decrease customer’s motivation to visit them, hence decreasing profit.

Therefore, the newest store’s best seller cannot be used to determine customer’s preference, because we need to consider its location and how local people’s appetite differs from the nation’s preference. In addition, it is self evident that selling more is not equivalent to making more profit, because we must consider each individual product’s marginal revenue.