Which of the following statements is true regarding the leverage of supply-chain savings?
A) Supply chain leverage is about the same for all industries.
B) Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales.
C) Supply chain savings exert more leverage as the firm has a lower net profit margin.
D) Supply chain leverage depends only upon the percent of sales spent in the supply chain.
E) None of the above is true.

Question

Quizplus · Accepted Answer

Supply chain savings exert more leverage on a firm's profitability when the firm has a lower net profit margin. This is because even small savings in the supply chain can significantly impact the bottom line for companies with thin margins.

Which of the Following Statements Is True Regarding the Leverage