As the ratio of the cost of overstocking to the cost of understocking gets smaller,
A) the optimal level of product availability becomes irrelevant.
B) the optimal level of product availability decreases.
C) the optimal level of product availability remains stable.
D) the optimal level of product availability increases.
Answer: D
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In countries with high levels of economic development, low incomes limit the range of
promotional tools available. In such countries, free samples and demonstrations are more likely to be used than coupons or on-pack premiums. Indicate whether the statement is true or false
Which of the following is a possible trap of a price-cutting strategy?
A) Low prices usually achieve increases in both market share and market loyalty when customers switch. B) The company might need additional business because it has excess plant capacity. C) The company can initiate price cuts to dominate the market through lower costs. D) Consumers might not demand price concessions in the future. E) Competitors that match low prices might have longer staying power because of deep cash reserves.
Define the terms slang, jargon, and euphemism. When is each type of expression appropriate? When do problems arise?
The gross margin ratio:
A. Should be greater than 1 for merchandising companies. B. Is a measure of liquidity and should exceed 2.0 to be acceptable. C. Indicates the percent of sales revenue remaining after covering the cost of the goods sold. D. Is also called the profit margin. E. Is also called the net profit ratio.