Trade promotions lead to a significant ________ in lot size and cycle inventory because of forward buying by the ________.

Question

Quizplus · Accepted Answer

Trade promotions often involve offering discounts or special deals on products to retailers. This can encourage retailers to purchase larger quantities of the product than they normally would, known as forward buying. As a result, there is an increase in lot size, or the amount of product ordered at one time, and an increase in cycle inventory, or the amount of inventory held at any given time. This is because retailers are trying to take advantage of the promotion and stock up on the product while it is on sale. Therefore, the correct answer is B.

Trade Promotions Lead to a Significant ________ in Lot Size