As the number of facilities in a supply chain increases
A)the inventory and resulting inventory costs also increase.
B)the inventory and resulting inventory costs decrease.
C)the inventory increases and resulting inventory costs decrease.
D)the inventory decreases and resulting inventory costs increase.

Question

Quizplus · Accepted Answer

As the number of facilities in a supply chain increases, the inventory also increases due to the need to transport goods between facilities, resulting in higher inventory costs. This is known as the bullwhip effect, which causes inventory to accumulate as it travels upstream through the supply chain. Therefore, option A is the best choice.

As the Number of Facilities in a Supply Chain Increases