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Question 415 - CSCP discussion

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Which of the following actions by a manufacturer most likely would improve service levels throughout the supply chain?

A.
Increasing promotions
Answers
A.
Increasing promotions
B.
Increasing market penetration
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B.
Increasing market penetration
C.
Reducing product variety
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C.
Reducing product variety
D.
Reducing profit-margin expectations
Answers
D.
Reducing profit-margin expectations
Suggested answer: C

Explanation:

Service Levels: These are measures of the quality of service provided to customers, often including factors like on-time delivery, order accuracy, and product availability.

Product Variety: Having too many product variants can complicate inventory management, production scheduling, and forecasting, leading to inefficiencies.

Impact of Reducing Product Variety: Simplifying the product range can lead to better inventory management, easier forecasting, and more focused production efforts, which in turn can improve overall service levels.

Alternative Options: Increasing promotions or market penetration (Options A and B) do not directly address service level improvements. Reducing profit-margin expectations (Option D) might not sustainably improve service levels and could hurt profitability.

Reference: Inventory Management studies, Product Line Simplification literature.

asked 16/09/2024
Randhir Singh
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