Business homework help

PHARMASIMQuality AssuranceOver-the-counter medicines are required by law to show the date through which themanufacturer guarantees full potency. Many distributors will not accept delivery of product thatis within a year of its expiration date. A batch of Allround is within six months of expiration, andyou need to decide what to do with it. One option is to ship the product and hope that distributorsdo not return it. If they do, you will need to ship new product and dispose of the returns. Inaddition to the cost, the returns could strain your relationship with the distributors. Anotheroption is to dispose of the whole batch up front at a cost of $100,000 and avoid the appearanceof trying to dump old product on your distributors. Finally, you could sell the inventory to a jobberwho has a more flexible policy on expiration dates, but they are offering to buy it below cost, sothere will be a net charge to you of $50,000. How do you want to handle the expiring batch ofproduct?1.One option is to ship the product and hope that distributors do not return it. If they do,you will need to ship new product and dispose of the returns. In addition to the cost, thereturns could strain your relationship with the distributors.2.Another option is to dispose of the whole batch up front at a cost of $100,000 and avoidthe appearance of trying to dump old product on your distributors.3.Finally, you could sell the inventory to a jobber who has a more flexible policy on expirationdates, but they are offering to buy it below cost, so there will be a net charge to you of$50,000