APICS Certified in Logistics, Transportation and Distribution (CLTD) — Question 152

A logistic team has developed new packaging for their best-selling product that reduces the packaging costs by 60% and the overall package size by 25%. The material can no longer be stacked on pallets and must be shipped and stored in non-stackable, returnable plastic bins.
Which of the following statements bests represents the potential trade-offs of implementing this change?

Answer options

• A. Higher labor costs, improved customer service, and no change in warehouse costs
• B. Higher labor costs, increase in warehouse costs, and an increase in transportation costs
• C. Improved customer service, increase in warehouse storage costs, and a decrease in transportation costs
• D. Decrease in warehouse costs, increase in transportation costs, and no change in customer service

Correct answer: D

Explanation

The correct answer is D because implementing the new packaging reduces warehouse costs by allowing for more efficient use of space, even though it increases transportation costs due to the non-stackable nature of the bins. Options A, B, and C do not accurately reflect the cost dynamics and trade-offs associated with the new packaging method.