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To: Geoff Nunn who wrote (32548)	3/5/1998 10:07:00 PM
From: Sabrejet	Respond to of 176387

Would you consider the process of stuffing a channel quota/incentive related? There are those out there that will place orders knowing the order will be rejected by the client and then be forced to channel it back and take the charge. This process is done at the end of a quarter to "make" numbers. That's one of the problems with companies who consistantly backload the quarter. Who do you trust and believe? I'm not saying CPQ would do this but I wouldn't put it past anyone when the incentives are there (financially). BTW, how would you like to be the man in charge of the "middle"?! No where to put these machines and there still coming in the front door! Now that would be fun! seczebra

To: Geoff Nunn who wrote (32548)	3/5/1998 10:24:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Geoff, the way a channel can be stuffed with bogus sales is as follows: Suppose you are a retailer and I say to you, Mr. retailer, if you want to carry my line you must take such and such amount of product. You say to the manufacturer "But I can't afford to pay for all of that stuff, and besides, if it doesn't sell by the summer It'll be worthless." "Not to worry", says the wily manufacturer. "Pay me only for the units you sell. I'll take back whatever is left over by the beginning of the summer." Now, the manufacturer books all of that inventory as a sale, and the retailer views it as consignment merchandise (so it doesn't show up on his balance sheet as inventory and accounts payable). Now I'm not claiming that this happened here, but it has happened with other companies. In fact, there is a famous B-school case called "Scott Fertilizer" that illustrates this. Regards, Paul