A Retailer Uses the Percentage Variation Method in Inventory Level

question 54

Multiple Choice

A retailer uses the percentage variation method in inventory level planning.If the store plans an average monthly stock of $200,000 and September sales are estimated at 15 percent more than average,the store's planned inventory level for September is _____.

• A)$120,000
• B)$200,000
• C)$215,000
• D)$230,000

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Definitions:

Marginal Revenue

The increase in income resulting from the sale of one extra unit of a product or service.

Average Revenue

The amount of revenue a company receives per unit of sales, calculated by dividing total revenue by the number of units sold.

Market Equilibrium

A condition in which market supply and demand balance each other, and as a result, prices become stable.

Competitive Industry

A competitive industry is one where numerous producers compete with each other to satisfy the needs and wants of consumers, characterized by free entry and exit and a high level of innovation.