Feasibility of Mechanical Price Marking of Groceries at the Central Warehouse

Excerpts from the report: The analysis of mechanical warehouse price marking in this study is based on a hypothetical warehousing firm with a $40 million annual grocery volume. The firm's shipments are assumed to be equally divided among 5 days of each week. Twenty percent of the items require hand stamping, a function accomplished at the retail store, and 30 percent of the cases must be opened by hand. Presumably, 70 percent of the items are double-layer cases and 30 percent are single-layer cases. The wage scale at the retail store, for purposes of this analysis, is $2.60 per hour and $3 per hour at the warehouse. The objectives of this study include: (1) determining equipment available for price marking grocery products by machine ; (2) obtaining production rates and costs for machine-performed pricing; (3) developing layouts, operating procedures, and cost estimates per case for central warehouse pricing that compare with those used for conventional pricing methods; (4) determining the extent of zone pricing (assigning the identical units of an item to different price categories) and frequency of price changes, and the effect of these factors on central price marking; and (5) evaluating consumer reaction to the particular type of price marks produced by the equipment used during this study (the multi-impression price marker).