While Lohan Ltd have closed all their stores, they continue to sell goods online - Junior Cycle Business Studies - Question b(i) - 2022

Reduced Fixed Costs: By transitioning to an online-only model, Lohan Ltd will no longer incur expenses related to physical store operations. This includes significant fixed costs such as rent, rates, insurance, and salaries for store managers and staff. Reducing these fixed costs can lead to increased financial flexibility and allows the company to allocate resources more effectively.

Reduced Variable Costs: The move to online sales also helps Lohan Ltd decrease various variable costs associated with maintaining a physical storefront. For example, the company can expect a reduction in utility bills such as lighting and heating, as these expenses are minimized without the need for a physical space open to customers. Additionally, the cost of staffing the store during operating hours will also be reduced, contributing to overall operational savings.