Originally Posted by brangdon:
“Spending all the cash is correct, because if goods are not sold they are valued at what they paid. There's no point holding onto cash.
Despite putting her words in quotes, bold and italic, you've misquoted her. She says the waterbottles "look good" but doesn't mention colour or the stand. (It's about 29 minutes into iPlayer.)
She then says, "And whatever you think; a mixture of the other stuff". And then "It's up to you how much you buy now." So she's identified the items she thinks are important, the best sellers, and then given her team discretion over the rest. That's exactly what I said she did. They used the discretion she gave them to buy the wrong things.
Which she did. She told them to get a mixture of known good sellers, plus a few other things that were more speculative. It's a better strategy for the first restocking than the final restock, but it's not out-and-out wrong.”
Er, I'm sorry, but I can't go with you there
I agree that spending all the cash is right (because it's about investing in items that will then multiply money if they sell, and what does not sell will be counted as asset anyway - so they may just as well invest everything)
But when Tom proposed to reinvest the majority of their cash into the iBugs, she clearly replies "no"and then added, as was quoted - and you justly corrected - to get more waterbottles
because they look good, which isn't exactly a good reason to buy something: they clearly didn't shift well, or at least nowhere near as fast as others like the iBugs
She also asks them to buy a "mixture of the other stuff, it's up to you how much you buy now" - so she doesn't ask them to get a mixture of known good sellers, but just of "the other stuff". Essentially she's a) confusing, not giving them clear instructions and b) failing to recognize what this task was about
: since this was the second restock, she should have, at this stage, told them to reinvest exclusively in one, or maybe a couple of items, i.e. those that had the best margin and sold the fastest (and based on what we saw, their one best-seller were the iBugs, although they did mention in the boardroom that eyelashes sold well too, if I remember correctly) certainly not in "a mixture", discretion or not. That's going completely against the idea behind this task - to identify what sells and focus just on that to maximise profit
Finally you say that they "used the discretion she gave them to buy the wrong things": unless I missed something (and I may have), we don't know what they actually bought so that's not a call we can make either way