A clothing retailer has been striving to reduce the costs of its inventory, but many of its customers are switching to competitors because they do not want to wait for the retailer to order the items. This retailer is experiencing
A) customer satisfaction.
B) stock-out costs.
C) production concerns.
D) holding costs.
E) just-in-time inventory.

Question

Quizplus · Accepted Answer

The situation described in the question is a stock-out cost, where the retailer is not able to fulfill customer demand due to inventory shortages. The retailer's efforts to reduce inventory costs are causing customers to switch to competitors, resulting in lost sales and potential long-term damage to the retailer's reputation.

A Clothing Retailer Has Been Striving to Reduce the Costs