Asked by Sarah Gascon on Apr 25, 2024

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As the number of facilities in a supply chain increases

A) the inventory and resulting inventory costs also increase.
B) the inventory and resulting inventory costs decrease.
C) the inventory increases and resulting inventory costs decrease.
D) the inventory decreases and resulting inventory costs increase.

Inventory Costs

Expenses associated with holding and managing stock, including costs of storage, insurance, and depreciation.

Supply Chain

A Supply Chain encompasses the entire process of making and selling commercial goods, including raw materials, manufacturing, distribution, and the sale of the finished product.

Facilities

Buildings, equipment, and services provided for a particular purpose, especially in relation to the operation of a company or for public use.

  • Comprehend how the number and location of network facilities affect overall transportation and inventory expenses.
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LN
Luyen Nguyen8 days ago
Final Answer :
A
Explanation :
As the number of facilities in a supply chain increases, the inventory also increases due to the need to transport goods between facilities, resulting in higher inventory costs. This is known as the bullwhip effect, which causes inventory to accumulate as it travels upstream through the supply chain. Therefore, option A is the best choice.