APICS Certified Supply Chain Professional (CSCP) — Question 98

Which of the following consequences is a result of shipping directly from the point of manufacture to the customer rather than through a distribution network?

Answer options

• A. Delivery lead times are consistent.
• B. Risk pooling benefits are negated.
• C. Distribution overhead is increased.
• D. Order-fill rate is decreased.

Correct answer: B

Explanation

The correct answer is B because shipping directly eliminates the benefits of risk pooling that typically occur in a distribution network, where inventory can be shared among multiple locations to mitigate stockouts. Options A, C, and D do not accurately describe the effects of direct shipping; lead times may vary, overhead might decrease, and order-fill rates can actually improve due to reduced handling.