Business -Assignment Essay Example | Topics and Well Written Essays - 500 words

Business -Assignment - Essay Example The increase in unemployment would result to lesser people having jobs. Lesser people having jobs would translate to lesser Tesco sales. People have less money to buy Tesco products. Clearly, one possible effect is the decline in the company’s sales(Geroski & Gregg, 1997,49). Another possibility is the increase in variable expenses. Inflation would translate to higher prices of commodities, raw materials and other purchase amounts. The company must spend more to purchase the same number of inventory sold in the Tesco Plc stores. The prices of other products sold in its outlets would rise. Obviously, another possibility is the increase in variable expenses(Lipsey & Chrystal,2007,334). A third possibility is an increase in fixed expenses. The electricity cost could increase because of the increase in the electricity company’s operating expenses. The water utility company would increase prices. The telephone costs could demand a price increase. The fixed salary of Tesco employees could increase. Definitely, A third possibility is an increase in fixed expenses(Ingham,2000,47). A fourth possibility is the decline in purchases. A decline in sales would result to an oversupply of products being displayed at the Tesco Plc shops. Many of the inventory items displayed in the Tesco Plc will have a high probability of expiring because of the slowdown in demand for Tesco Plc product. The company, Tesco Plc, will be forced to reduce the number of items purchased due to the large stocks of unsold store items displayed. This reduction in Tesco Plc purchases would ensure that the newly bought products will be sold only after the prior –purchased products have been sold. Surely, a fourth possibility is the decline in purchases(Mullard, 1995,113). A fifth possibility is retrenchment of some employees. A reduction in sales would mean that the company may generate a large decline in the company’s products. Thus, the company has to