APICS Certified in Logistics, Transportation and Distribution (CLTD) — Question 18

Compared to a centralized distribution network strategy, an organization using a decentralized distribution network strategy can usually expect:

Answer options

• A. lower cost of lost sales and higher inventory cost
• B. higher cost of lost sales and higher inventory cost.
• C. lower cost of transportation and lower warehousing cost.
• D. higher cost of transportation and lower warehousing cost.

Correct answer: C

Explanation

The correct answer is C because a decentralized distribution network often results in lower transportation costs due to closer proximity to customers, as well as reduced warehousing costs. The other options suggest higher costs for lost sales and inventory, which typically do not align with the advantages of decentralization.