Question

When there is high inventory turnover, you can expect less of a risk for markdowns because ___________.

a. price points had been set higher to accommodate for potential sales loss
b.there merchandise does not stay in stores for long enough to be marked down
c. buyers made poor assortment predictions
d. consumers are wary of merchandise that sits on the shelves too long
e. lower morale; associates will not want to take the markdowns?

Answer 1

The correct answer is B, There merchandise does not stay in stores for long enough to be marked down.

Step-by-step explanation:

When there is a high inventory turnover, you can expect less of a risk for markdowns because there merchandise does not stay in stores for long enough to be marked down.

Markdown means the Reduction in price of the product. Inventory turnover is the amount of time in which the company has sold and replaced the inventory. So in this case, it is said that when there is high inventory turn over, then there is no threat of markdown because high inventory turnover means, people are purchasing the product and demanding it on regular basis, so your product does not stay long on the shelves in the market and thus the threat of markdown is significantly decreased.

Answer 2

When there is high inventory turnover, you can expect less of a risk for markdowns because there merchandise does not stay in stores for long enough to be marked down.
High inventory turnover means the rate at rich you have inventory coming in and going out is high. You are selling inventory at a fast rate therefor you have no need to lower the selling price of the product to make sales.