Final answer:
Ordering large quantities directly from mills can be cost-effective due to economies of scale and eliminating the middleman, but it also requires consideration of storage costs, waste, and shipping factors.
Step-by-step explanation:
When considering whether ordering large quantities directly from mills is beneficial, we need to analyze a few factors. Bulk purchasing may lead to cost savings because of economies of scale. This means that the per-unit cost of materials can decrease as the quantity ordered increases, which is beneficial for businesses that have large usage needs and adequate storage. Additionally, ordering directly from the mills can cut out the middleman, potentially leading to better prices and more direct control over the supply chain.
However, it's not always the case that larger orders are the most cost-effective choice. Storage costs, potential for waste due to material spoilage or obsolescence, and cash flow implications need to be considered. The efficiency of ordering directly from mills also depends on their location, shipping costs, minimum order requirements, and the ability to meet customer demand without delays. Thus, while ordering large quantities directly from linen mills may be cost-effective in some cases, it requires careful consideration of these factors.