APICS Certified Supply Chain Professional (CSCP) — Question 310

A retailer that operates a three-level distribution network is considering eliminating one level in the network and shipping directly from the regional warehouses to the retail outlets. Which of the following outcomes is most likely to result?

Answer options

• A. Total transportation costs will decrease.
• B. Retail outlet order frequency will decrease.
• C. Deliveries to the retail outlets will decrease in number.
• D. Risk pooling benefits will decrease.

Correct answer: A

Explanation

Eliminating a level in the distribution network typically streamlines the shipping process, which can lead to lower total transportation costs. The other options are less likely; order frequency may not necessarily decrease, deliveries could remain the same or increase, and risk pooling benefits would generally improve with fewer levels.