Identify one situation in Walmart that could benefit from contribution margin analysis

Running Head: Wal-Mart
Wal-Mart
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WALMART
Wal-Mart is said to be the leading retailer distribution company in the U.S It was formerly known as Wal-Mart Inc. stores and later changed its name to Wal-Mart in 2008. At some point in time it made the decision to lower the prices of commodities so as to increase sales and this has seemed to work well for it since its sales volume stands at a very high rate to date (Chloe).
On February 22, 2010, Wal-Mart made it public that it would purchase Vudu Inc. a company that deals with delivering movies to Internet enabled television sets and Blu-ray players. It said that it would buy Vudu Inc for an estimated over $100 million. In making this decision certain costs were to be incurred such as sunk costs. Sunk cost is the cost which has already been incurred and cannot be recovered. Therefore by Wal-Mart making a purchase of Vudu Inc. Company the cost cannot be reversed with any future decision (Chloe).
Another cost is allocation costs such as rent, insurance and administrative cost that will be incurred. On the other hand relevant costs made are such as incremental costs. These are costs are incurred if a specific action is taken. However they can be avoided by choosing not to take that action. Therefore by Wal-Mart choosing to purchase Vudu Inc. it experiences an extra cost.
Radio frequency identification (RFID) is a technology that uses electromagnetic waves to transfer data between the object and a person or animal for the purposes of tracking. In June 2004, Wal-Mart made public that it would require 100 of its top suppliers to put RFID tags on the supplies it delivered to Wal-Mart and later 200 more top suppliers would follow suit.
This would be used as a measure to track goods entering Wal-Mart distribution centers and later to their individual stores. Since Wal-Mart is known to be powerful due to its high revenue making, this decision changed the approach of many other companies. They adopted this form of system.
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This decision had four main dimensions of impact made such as Innovation, Volume and cost, Upstream or Supply chain extensions, and Downstream or Supply main Extensions.
In the fiscal year of 2006, Wal-Mart issued $7.7 billion in a long term debt. Proceeds from this were used to repay outstanding commercial paper debts and various running of the organiz...