A manager orders a large quantity of stock at a discounted price from their supplier. Sales over the following period are poor, but the supplier offers the same deal three months later. The manager purchases another large quantity of the same item, but sales remain poor. The manager has fallen into the:
A) framing trap.
B) confirmation bias trap.
C) not cutting your losses trap.
D) pattern recognition trap.
E) sticking with the status quo trap.

Question

Quizplus · Accepted Answer

The manager is in the trap of not cutting their losses, as they continue to purchase a large quantity of stock even though sales have been poor. They are holding onto the belief that the discounted price will eventually lead to profits, instead of realizing that it may not be a wise investment to continue purchasing this item.

A Manager Orders a Large Quantity of Stock at a Discounted