The drawback of centralized inventory is:
A) that it undercuts the dispersed distribution concept.
B) that it increases the amount of inventory required.
C) strains the ability of the carrier network.
D) that it extends lead times and results in higher transportation costs.

Question

Quizplus · Accepted Answer

Centralized inventory can result in longer lead times and higher transportation costs as products have to be transported from one central location to various distribution centers or retail stores. This can also put a strain on the carrier network. Additionally, centralized inventory may not be suitable for businesses that operate in multiple regions or countries, as it could result in higher inventory levels required to meet demand in each area. Therefore, D is the best answer.

The Drawback of Centralized Inventory Is