APICS Certified Supply Chain Professional (CSCP) — Question 137

A company has a single manufacturing facility. It distributes the products through retail stores located in various regions. Which of the following distribution strategies will minimize the company's warehousing costs?

Answer options

• A. Utilizing third-party logistics (3PL) providers
• B. Pooling inventory in regional warehouses shipping to multiple retail
• C. Shipping directly from the manufacturing facility to retail locations
• D. Cross-docking at regional warehouses shipping to multiple retail stores

Correct answer: C

Explanation

Shipping directly from the manufacturing facility to retail locations eliminates the need for additional storage, thus reducing warehousing costs. The other options involve intermediary steps or additional storage facilities which can increase overall expenses.