APICS Certified in Logistics, Transportation and Distribution (CLTD) — Question 31

A firm offers their customers shorter order cycle times and increased product variety. Generally, this action would have which of the following impacts on total logistics costs?

Answer options

• A. Increases total logistics costs
• B. Reduces total logistics costs
• C. Has no impact on total logistics costs
• D. Only affects service levels, not costs

Correct answer: C

Explanation

The correct answer is C because while shorter order cycles and increased variety may seem to imply higher costs, they can lead to more efficient logistics operations that ultimately do not increase total costs. Options A, B, and D misinterpret the relationship between service levels and logistics costs, as they assume a direct correlation that is not necessarily true.