Final answer:
Store managers face challenges such as fluctuating consumer demand, the need for efficient production processes, determining the right output level, pricing strategies, and the amount of labor required when placing orders for bakery products. These decisions are influenced by market structure, including market power and entry barriers.
Step-by-step explanation:
The challenges a store manager faces when placing orders for bakery products are manifold, primarily because these items are often perishable, with a short shelf life, and demand can fluctuate greatly. A key consideration is assessing consumer demand, which dictates not only what products should be made, but also the volume. This entails analyzing market trends, historical sales data, and local preferences. Deciding on the production process is another crucial factor, especially in terms of cost efficiency, product quality, and the ability to react to demand changes. Managers must carefully choose the output level to minimize waste and avoid stockouts.
Other factors include setting a competitive yet profitable price point, and determining the amount of labor needed, which can fluctuate with output level. The marketplace structure also influences these decisions. For instance, in a competitive market, prices may be lower, which affects the price the firm can charge.
Finally, managers must anticipate challenges such as how difficult it could be for new competitors to enter the market (market entry barriers) and the degree of market power the firm has, which can influence pricing and marketing strategies.