Retailers Often Find the 80-20 Principle Evident Within the ABC

question 86

Multiple Choice

Retailers often find the 80-20 principle evident within the ABC analysis. What does the 80-20 principle imply?

• A) About 20 percent of a retailer's sales promotion sells 80 percent of its inventory.
• B) Approximately 20 percent of a retailer's sales come from 80 percent of its products.
• C) Approximately 80 percent of a retailer's inventory was sold, and 20 percent was wasted.
• D) 80 percent of the retailer's customers are repeat customers and only 20 percent are new.
• E) Approximately 80 percent of a retailer's sales come from 20 percent of its products.

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Definitions:

Utility Function

A mathematical representation that describes how consumers rank preferences among different commodity bundles.

Campers' Utility

A hypothetical measure of the satisfaction or happiness that campers gain from participating in camping activities or utilizing camping facilities.

Externalities

Economic side effects or consequences that affect uninvolved third parties; can be either positive or negative.

Groschens

A historic European coin of small denomination, particularly used in Austria and Germany.