"it will be very important to maintain product continuity. We have a large base of devoted customers. We want to make sure that the quality and key characteristics of island knight stay the same through this transition. Talk to frank, our consulting professional perfumer, for more information about the cologne. Seasonal variations in costs are the single most significant factor in our deciding to go with another supplier, so finding a way to limit that should be the top priority. The overall marginal costs and shipping costs are probably somewhat less significant. You may want to talk to cindy, the product manager for island knight, regarding pricing information about the product." what is the best action to take next?

In this case, the next best action is to engage in forward contracts with  our supplier of cologne.  That means that the price our company pays in the future for cologne is pre-negotiated, agreed, and fixed together with the quantity.  This will smoothen seasonal variations in cost, as the forward contracts hedge against the risks of rising prices.

Explanation:

For instance, with a forward contract, there is a private agreement between our company and the supplier of cologne that simultaneously obligates our company to purchase certain quantities of cologne and the supplier to sell the cologne at a set price at a future point in time.  While our company will benefit during seasons with rising prices, it loses when prices are falling.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

d. low interest rates