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:

Exchange Theory

A social theory that views interactions and relationships as transactions where individuals seek to maximize rewards and minimize costs.

Decision-Making

The cognitive process of choosing a course of action among multiple alternatives, often involving considerations of risk and reward.

Coveted Rewards

Highly desired benefits or prizes that individuals or groups seek to obtain, often driving competition and motivation.

George Homans

An influential American sociologist known for his work in developing social exchange theory, which views social interactions in terms of cost-benefit analyses.