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Question 84 - CSCP discussion

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Keeping all other factors equal, a company typically will try to maintain higher service levels for products with:

A.
wider variety.
Answers
A.
wider variety.
B.
shorter lead time.
Answers
B.
shorter lead time.
C.
higher profit margins.
Answers
C.
higher profit margins.
D.
lower sales volumes.
Answers
D.
lower sales volumes.
Suggested answer:

Explanation:

Context: Companies often prioritize service levels based on the profitability of their products.Options Breakdown:A . Wider variety: While a wider variety can attract more customers, it does not directly influence the prioritization of service levels.B . Shorter lead time: Short lead times are desirable but not the primary reason for maintaining higher service levels.C . Higher profit margins: Products with higher profit margins contribute more significantly to the company's bottom line, justifying higher service levels to ensure customer satisfaction and repeat business.D . Lower sales volumes: Lower sales volumes typically do not warrant higher service levels due to their limited impact on overall profitability.Answer: Justification: Companies aim to maintain higher service levels for high-margin products to maximize profitability and customer retention.Supply chain management textbooksIndustry practices on service level prioritization

asked 16/09/2024
Simon John Mather
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