Manufacturers may prefer to sell their closeouts,canceled orders,and out-of-season merchandise to factory outlets rather than off-price chains because _____.
A)off-price chains can generate high profit margins
B)off-price chains have too much power
C)factory outlets generate low short-term cash flow
D)greater control results in less disturbance to traditional channels

Question

Quizplus · Accepted Answer

Factory outlets offer manufacturers greater control over the distribution of their closeouts, canceled orders, and out-of-season merchandise, resulting in less disturbance to their traditional channels. This makes factory outlets a preferred choice over off-price chains. Additionally, factory outlets have a lower short-term cash flow and do not generate high profit margins like off-price chains.

Manufacturers May Prefer to Sell Their Closeouts,canceled Orders,and Out-Of-Season Merchandise