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Question 411 - CSCP discussion

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Which of the following consequences are primary objectives in network design?

A.
Improve service level and increase revenue.
Answers
A.
Improve service level and increase revenue.
B.
Improve service level and reduce inventory cost.
Answers
B.
Improve service level and reduce inventory cost.
C.
Increase market share and revenue.
Answers
C.
Increase market share and revenue.
D.
Reduce inventory cost and increase market share.
Answers
D.
Reduce inventory cost and increase market share.
Suggested answer: B

Explanation:

The primary objectives in network design for supply chains are to improve service levels while simultaneously reducing inventory costs. Improving service levels involves enhancing the ability to meet customer demand promptly and efficiently, which can lead to higher customer satisfaction and loyalty. Reducing inventory costs involves optimizing inventory levels to minimize holding costs, obsolescence, and capital tied up in stock. Together, these objectives ensure that the supply chain operates efficiently and cost-effectively, contributing to overall profitability and competitiveness. Other potential objectives like increasing market share and revenue (options C and D) are important but secondary to the core goals of service level improvement and cost reduction.

Reference: Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). 'Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies.'

asked 16/09/2024
Lina Brown
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