The transportation manager at a consumer goods manufacturer has decided to begin shipping full truckload rather than less-than-truckload quantities. Which of the following outcomes is likely following implementation of this decision?
The transportation manager at a consumer goods manufacturer has decided to begin shipping full truckload rather than less-than-truckload quantities. Which of the following outcomes is likely following implementation of this decision?
Shipping full truckload quantities rather than less-than-truckload quantities will likely result in longer lead times as seen by the customer. This is because the manufacturer will need to accumulate enough orders to fill a truckload before shipping, which could delay the shipment compared to sending out smaller, more frequent less-than-truckload quantities.
B: The "key" being - Lead times AS SEEN by the customer will increase.
Why should it not be C? Production efficiencies at the manufacturer will increase too.
Why is this the right answer?
Inventory levels will increase because they are holding more inventory until they get a full truckload to ship. Lead times will increase for the same reason. Transportation costs will decrease. Product efficiencies would not be affected