(a) Explain six functions of wholesalers to manufacturers (b) State four problems that a cooperative society may likely face.

Answer Details

(a) Six functions of wholesalers to manufacturers

1. Bulk buying: The wholesaler buys goods in large quantities from the manufacturer, thereby providing a ready and steady market that keeps the factory in continuous production.
2. Storage / warehousing: The wholesaler holds stock in his warehouse, relieving the manufacturer of the cost and space needed to store finished goods and freeing factory space for production.
3. Finance: By paying promptly (often in cash or on short credit) for large consignments, the wholesaler provides the manufacturer with working capital to buy raw materials and pay for labour.
4. Risk bearing: Once the wholesaler takes delivery, he bears risks such as fall in price, deterioration, theft, fire and changes in demand, relieving the manufacturer of these losses.
5. Distribution / breaking bulk indirectly: The wholesaler spreads the manufacturer's goods over a wide area by supplying many scattered retailers, so the manufacturer deals with a few wholesalers instead of thousands of retailers.
6. Market information and advice: The wholesaler, being close to retailers and consumers, feeds back information on consumer tastes, price levels and rival products, guiding the manufacturer on what and how much to produce.

(Other acceptable points: advertising and sales promotion on behalf of the manufacturer; saving the manufacturer selling and administrative costs.)

(b) Four problems a cooperative society may likely face

1. Shortage of capital: Members are usually people of modest means, so the society finds it hard to raise enough funds for large-scale operations or expansion.
2. Poor / inefficient management: Officers are often elected members who may lack business and managerial expertise, leading to weak administration.
3. Dishonesty and mismanagement of funds: Elected officials may embezzle or misuse the society's money, and weak record keeping makes fraud difficult to detect.
4. Apathy and lack of member cooperation: Many members show little interest, fail to attend meetings or default in paying subscriptions, weakening the society.

(Other acceptable points: political interference; keen competition from large private firms; slow decision making because of democratic voting.)