Question

The North American Industrial Classification System (NAICS) code is used to reflect the?

1) location of the retailer.
2) industrial category of the retailer.
3) type of merchandise the retailer sells.
4) size of the retailer in terms of sales dollars.
5) margin the retailer maintains in its industrial category.

Answer 1

The NAICS code reflects the industrial category of the retailer, organizing businesses based on their economic activities and influencing factors like activity location and inventory management. Option 2.

Step-by-step explanation:

The North American Industrial Classification System (NAICS) code is used to reflect the industrial category of the retailer(2). This system categorizes businesses based on the type of economic activities they are involved in. For instance, the production and sale of long-lasting durable goods like cars and appliances will fall under a different NAICS code than businesses dealing with nondurable goods such as food and clothing. Industrial categories can strongly influence other business factors, such as the location of different types of economic activities, inventory management, and investment in structures like homes, offices, and factories.