APICS Certified Supply Chain Professional (CSCP) — Question 230

In order to be able to fulfill increasing market demand, a company is considering adding warehouses rather than increasing the capacity of existing warehouses. If the warehouses are added, the network costs most likely will:

Answer options

• A. be unchanged.
• B. increase.
• C. decrease.
• D. increase initially and then decrease.

Correct answer: B

Explanation

Building new warehouses will likely lead to increased network costs due to additional overheads associated with establishing and maintaining these facilities. The other options are incorrect because network costs are generally expected to rise with the addition of new warehouses instead of remaining stable, decreasing, or fluctuating.