Situations where incentives offered to different stages or participants in a supply chain lead to actions that increase variability and reduce total supply chain profits are referred to as
A) incentive obstacles.
B) information processing obstacles.
C) operational obstacles.
D) pricing obstacles.
E) behavioral obstacles.

Question

Quizplus · Accepted Answer

Incentive obstacles occur when incentives offered to different stages or participants in a supply chain lead to actions that increase variability and reduce total supply chain profits. This misalignment of incentives can cause participants to act in their own interest rather than the interest of the entire supply chain, leading to inefficiencies and increased variability.

Situations Where Incentives Offered to Different Stages or Participants in a Supply