Steven Managed an Auto Parts Store in the 1990s

question 9

Multiple Choice

Steven managed an auto parts store in the 1990s.At that time,stockouts-failure to have the parts auto mechanics needed to do their work that day-increased the likelihood of the mechanics becoming customers of competing auto supply stores.To avoid this problem and keep his business customers,Steven most likely

• A) canceled orders and shifted the business to competitors.
• B) increased promotional outlays to overcome customer dissatisfaction.
• C) used exclusive geographic territories to reduce supply chain inefficiencies.
• D) stockpiled inventory, adding to the cost of providing auto parts.
• E) returned to traditional distribution center logistics.

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Definitions:

Competitive Firm

A company operating in a market where it must compete against others for the same customers or resources, characterized by its efforts to offer better products, prices, or services.

Inelastic Demand

Characterized by a consumer's lack of sensitivity to price changes, resulting in minimal changes in quantity demanded despite fluctuations in price.

Competitive Industry

An industry characterized by numerous firms, where no single firm can dictate the price of goods or services.

Marginal Cost

The cost related to creating an additional unit of a product or service.