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Scenario 13.2 Use the Following to Answer the Questions

question 221

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Scenario 13.2
Use the following to answer the questions.
Star Supplies, Inc. manufactures commercial-grade floor cleaners, such as vacuums and floor polishers. The firm has recently begun manufacturing other janitorial-related product lines, such as paper products and chemical cleaners. Star Supplies distributes its products in two ways. It sells its vacuum, floor polisher, and janitorial supply products to an independent business that takes title to the products and then sells them to various small businesses throughout the region. Also, Star has a list of large businesses that it distributes to directly, on an as-needed basis. These businesses keep very little inventory and purchase janitorial supplies in small quantities. Recently, Star has decided to add two new service product lines-paper shredding and a uniform rental service. Clint Rodriguez, the marketing manager, is conducting a meeting to discuss the ways in which Star can strategically manage these new businesses. Star has the choice of marketing the paper shredding service to their large business clients, by picking up the paper as they drop off the other janitorial supplies, or they can buy a small paper shredding business and market to both large and small business customers. With regard to the uniform rental service, Star can either pick up and deliver the uniforms to the small businesses themselves, or contract that out to a third party.
-Refer to Scenario 13.2. When Clint suggested that Star consider purchasing a paper shredding business and then offer the service to its large and small business customers, he was suggesting a method called ____, where Star would be the ____.

Definitions:

Sweater Costing

The process of determining the production and associated costs of manufacturing a sweater.

Saskatchewan

A province in western Canada, known for its vast open spaces and agricultural produce.

First Mortgage

A primary lien on a property that takes precedence over all other mortgages or liens, typically related to the original loan used to purchase the property.

Second Mortgage

A loan taken out on a property that is already mortgaged, with the second loan being subordinate to the first.