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A company finds that one of its warehouses is out of capacity to store products. Expanding the physical size of the warehouse is not an option. The most appropriate solution would be to increase the:
The purpose of price differentiation is to:
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A company considers moving a portion of its production to a distant country to support a major customer. Which of the following actions is most effective in mitigating the risk of financial loss in the event of a global economic downturn?
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Question 147 - CSCP discussion

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A company closely monitors supplier performance and notices recent late deliveries from one supplier. The supplier discloses flood damage at the plant. The company quickly shifts sourcing to a new supplier and has minimal loss of sales. Which of the following risk strategies reflects the company's actions?

A.
Achieving low cost through reaction
Answers
A.
Achieving low cost through reaction
B.
Creating an adaptive supply chain community
Answers
B.
Creating an adaptive supply chain community
C.
Reducing supply chain vulnerability
Answers
C.
Reducing supply chain vulnerability
D.
Investing in redundancy
Answers
D.
Investing in redundancy
Suggested answer: D

Explanation:

Supplier Performance Monitoring: Regularly tracking supplier performance is crucial for identifying potential risks early.

Flood Damage Disclosure: When the supplier disclosed the flood damage, it indicated a high risk of continued disruptions.

Shifting Sourcing: The company's ability to quickly switch to a new supplier minimized the impact on sales, showing a prepared and proactive approach.

Risk Strategy:

Low Cost Through Reaction: This does not apply here as the company's response was proactive, not reactive.

Adaptive Supply Chain Community: Involves collaboration and flexibility but doesn't specifically address redundancy.

Reducing Vulnerability: More general, while the action taken is specifically an investment in redundancy.

Investing in Redundancy: Having multiple suppliers or backup suppliers ready to step in during disruptions directly fits the company's action.

Conclusion: The company's actions reflect an investment in redundancy by maintaining alternative suppliers to ensure supply continuity in case of disruptions.

Sheffi, Y. (2005). The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage. MIT Press.

Tang, C. S. (2006). Robust Strategies for Mitigating Supply Chain Disruptions. International Journal of Logistics, 9(1), 33-45.

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asked 16/09/2024
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