Costo Wholesale Corporation

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Costo Wholesale Corporation


Among the many effects of industrial revolution was the revolution in shopping styles. A number of departmental stores sprouted in United States. The idea of centralizing merchandize under one roof gained importance. With the advent of 20th century operational management strategies such as Just in Time (JIT) and Lean Manufacturing, companies had to alter its operational efficiency and the way it conducted its business in order to grow and stay competitive. Costco Wholesale Corporation entered the wholesale club industry in the early 1980s. With $72.5 billion in annual revenues, 54.1 million loyal cardholders, 551 warehouses and 142,000 employees, Costco stands today as the largest warehouse club chain in the world. Much of its success rests on its well taken forecasts and strategic targets. This paper will analyze historical data of Costco as well as its forecasting methods that are attributed to its success (Gerston, 2010 pp 50-72).

Discussion and Analysis

Forecasting is a vital function in most businesses. Businesses can forecast the demand for their product or services using many tools such as on historical data. With proper forecasting of needs such as supplies, revenue, and product required, a business can anticipate the demands of the consumer. Good forecasting will meet customer demand and decrease the cost of unsold inventory. Historical data will also show the increases and decreases in demand of seasonal products such as snow boots. Moreover, sales forecasts help manage costs before hand and in a peaceful manner. If a company fails to do so, unavoidable budget shortages can jeopardize companies savings and even throw it into a debt trap.

Costco Products and Services

Costco sells many foodstuffs that are usually of perishable nature such as fresh produce, beef, fish, and other meat, milk products, seafood, bakery items, perfumes and flowers, all types of clothings, stationary and books, accessories and computer software0, Home durables, electronics, solar panels, jewelry items, handicrafts, tires and tubes, art and craft, fine wine, hot tubs, furniture and caskets. Many warehouses have tire garages, medical stuff, other handy devices like electronic gadgets, optometrists, photo processors, and gas stations. These are examples of Costco's merchandising domains. Costco's business function, however, does not end here. Costco also is an investment broker and has its travel agency unit. An automobile purchasing program is also a Costco holding where members can purchase new cars and used cars at specially arranged and exclusive prices ( However, whether buyers using this ...
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