Which of the following situations is likely to cause forward buying among retailers?

Which of the following situations is likely to cause forward buying among retailers?

I. The supplier offers a temporary price discount
II. The supplier announces that she is about to cut her price permanently.
III. The supplier announces that she is about to raise her price permanently.

Group of answer choices
Only I
I, II, and III
Only II
Only I. and III
Only III

Answer

• Only I. and III
  Explanation:
  The supplier offers a temporary price discount
  III. The supplier announces that she is about to raise her price permanently.
  Forward buying is a common practice among retailer, which is done to counter the effects of increase in price of goods in future. This is accomplished through purchase of huge amount of goods, more than the current demand to ensure the cheap stock remains even when suppliers raise their prices. This is common if manufacturers are offering a temporary price discount or if the supplier announces that he/she will raise prices permanently in the future. The retailers will rush to purchase the goods at the low prices to ensure sufficient stock when prices go up.