Asked by Mercy Ikediuba on May 21, 2024
Verified
Inventory and facility costs increase as the number of facilities in a supply chain increase.
Facility Costs
Expenses associated with the physical means through which a company operates, such as rent, utilities, and maintenance of buildings and equipment.
- Grasp the relationship between the number of facilities and inventory and facility costs.
Verified Answer
JH
Jason HoàngMay 21, 2024
Final Answer :
True
Explanation :
As the number of facilities in a supply chain increase, the inventory holding costs and facility rental/maintenance costs also increase. This is because more facilities require more inventory to be held at different locations, and each facility requires its own rent, utilities, and maintenance expenses.
Learning Objectives
- Grasp the relationship between the number of facilities and inventory and facility costs.
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