__________ Reduce Costs and Maintain Low Prices by Buying Opportunistically

question 3

Multiple Choice

__________ reduce costs and maintain low prices by buying opportunistically from manufacturers with excess inventory,offering limited assortments and operating in low-rent locations.

• A) Category killers
• B) Specialty stores
• C) Factory outlets
• D) Extreme value retailers
• E) Convenience stores

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Definitions:

Alternative Use

The value or potential benefit that is foregone as a result of using an asset or resource in a particular way instead of another possible way.

Sunk Costs

are past expenses that have already been incurred and cannot be recovered or changed, and thus should not affect future business decisions.

Avoidable Costs

Expenses that can be eliminated if a particular decision is made, not incurred in the absence of the decision.

Fixed Costs

Fixed costs are those expenses that do not change in total despite changes in the volume of goods or services produced or sold.