Ramiro decides to keep relatively high levels of inventory even though it costs him more. Most likely Ramiro thinks the cost of _______________ are greater than the benefits of increasing his turnover rate.
A)collateral
B)portfolios
C)stockouts
D)revenue enhancements
E)handouts

Question

Quizplus · Accepted Answer

Stockouts refer to the situation where a retailer runs out of stock of a particular item, resulting in lost sales opportunities and customer dissatisfaction. Ramiro, therefore, keeps high inventory levels to avoid stockouts. He believes that the cost of carrying excess inventory is lower than the cost of lost sales and dissatisfied customers, which would result from stockouts.

Ramiro Decides to Keep Relatively High Levels of Inventory Even