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Question 270 - CSCP discussion

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The primary business advantage of developing an international supply chain is to:

A.
reduce transportation costs.
Answers
A.
reduce transportation costs.
B.
decrease inventory costs.
Answers
B.
decrease inventory costs.
C.
limit the number of component suppliers.
Answers
C.
limit the number of component suppliers.
D.
realize economies of scale in production and distribution.
Answers
D.
realize economies of scale in production and distribution.
Suggested answer: D

Explanation:

The primary business advantage of developing an international supply chain is to realize economies of scale in production and distribution. Here's why:

Economies of Scale: By sourcing and manufacturing on a global scale, companies can produce larger quantities at lower costs per unit. This includes benefits from bulk purchasing of raw materials and components.

Cost Advantages: Access to lower-cost labor and materials in different regions can significantly reduce production costs.

Market Expansion: An international supply chain allows companies to distribute products to a broader market, increasing sales volumes and spreading fixed costs over a larger base.

Specialization: Companies can take advantage of specialized skills and technologies available in different countries, enhancing production efficiency and product quality.

Christopher, M. (2016). Logistics & Supply Chain Management. Pearson.

Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.

asked 16/09/2024
Soumia Djenan
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