How does an improved inventory management through the use of an everyday low-pricing (EDLP) strategy benefit retailers?
A) It increases the total sales.
B) It increases the number of rain checks.
C) It leads to more frequent sales and markdowns.
D) It results in a need for more backup stock.
E) It increases the sales of slow-moving merchandise.

Question

Quizplus · Accepted Answer

The EDLP approach reduces the large variations in demand caused by frequent sales with large markdowns. As a result, retailers can manage their inventories with more certainty. Fewer stockouts mean more satisfied customers, resulting in higher sales. In addition, a more predictable customer demand pattern enables the retailer to improve inventory turnover by reducing the average inventory needed for special promotions and backup stock.

How Does an Improved Inventory Management Through the Use of an Everyday