A company resorts to discount blowouts to get rid of excess merchandise. Which of the following scenarios is most likely to have triggered this action?
A)increase in inventory costs
B)ineffective tracking of the inventory
C)overestimation of demand
D)increase in the price of raw materials

Question

Quizplus · Accepted Answer

Discount blowouts are often used to quickly sell excess merchandise when demand is not meeting expectations. Overestimation of demand could result in a surplus of inventory and trigger the need for a blowout sale. Increases in inventory costs or raw material prices could trigger other cost-cutting measures, but not necessarily discount blowouts. Ineffective tracking of inventory could also result in excess merchandise, but it is unlikely to be the sole reason for a discount blowout.

A Company Resorts to Discount Blowouts to Get Rid of Excess