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Question 107

Which of the following outcomes occurs when direct shipping is used instead of a distribution network?

    Correct Answer: D

    When direct shipping is used instead of a distribution network, inventory is sent directly from the supplier to the customer, bypassing intermediate storage or handling at distribution centers. This direct approach reduces the risk of inventory becoming obsolete because there are fewer stages and less time in the supply chain for inventory to become outdated. Additionally, direct shipping can enhance freshness for perishable goods and quick response for demand changes, contributing to reduced inventory obsolescence.

Discussion
piotruslOption: A

Would go for A - compare with #212

WHITExSPIRIT

Right answer is D. A is not correct as long as transportation costs should increase because we no longer use transport pooling on the delivery stage to the DC.