What trade-offs do managers need to consider when making transportation decisions?
A) Transportation cost versus inventory cost
B) Transportation cost versus customer responsiveness
C) Inventory cost versus customer responsiveness
D) A and B only

Question

Quizplus · Accepted Answer

Managers need to strike a balance between transportation cost and inventory cost while also ensuring customer responsiveness. Choosing a transportation mode that is cost-effective may lead to longer lead times and higher inventory costs. On the other hand, choosing faster transportation modes may increase transportation costs but reduce inventory costs. Similarly, faster transportation modes may improve customer responsiveness, but they may also increase costs. Therefore, managers need to make trade-offs between these factors to arrive at the most optimal transportation decision, and options A and B are the ones that need to be considered.

What Trade-Offs Do Managers Need to Consider When Making Transportation