APICS Certified Supply Chain Professional (CSCP) — Question 37

In a service environment, a decrease in demand over the long term will most likely result in:

Answer options

• A. decreased cost of service
• B. increased cost of service
• C. decreased cycle time
• D. increased cycle time

Correct answer: B

Explanation

The correct answer is B because a sustained decrease in demand can lead to higher per-service costs as fixed costs are spread over fewer services. Options A, C, and D are incorrect as they suggest a reduction in costs or cycle time, which is not typically the case when demand falls.