A Manager Orders a Large Quantity of Stock at a Discounted

question 4

Multiple Choice

A manager orders a large quantity of stock at a discounted price from their supplier. Sales over the following period are poor, but the supplier offers the same deal three months later. The manager purchases another large quantity of the same item, but sales remain poor. The manager has fallen into the:

• A) framing trap.
• B) confirmation bias trap.
• C) not cutting your losses trap.
• D) pattern recognition trap.
• E) sticking with the status quo trap.

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Definitions:

Location Decision

The process of determining the best place for a business to operate in terms of costs, resources availability, logistics, and market accessibility.

Maximize Profit

The strategy of making business decisions that increase the difference between total revenue and total cost to the highest possible level.

Firm's Profit

The financial gain realized when a firm's total revenues exceed its total expenses.

Productive

refers to the ability to produce goods or services efficiently, especially in terms of output per unit of input.