Professor Elam

Weekend January 7, 2016

I have always been skeptical of the LCM rule. This holds that retailers mark down their inventory to the lower of cost or sales price less cost to sell.

I have always maintained that if the stuff on aisle seven is not moving out the door the retailer lowers the price till it does, it is not getting more valuable sitting on the shelf.

Here is an article on 2016 Christmas season/

And here is a graphic that makes my point. In short the retailers did not keep this stuff at lower prices, they priced it to move.

I find chapters 8 and  9  in our Intermediate Text woefully out of date.