The best way to reduce overall distribution costs is to
A) use a total-cost approach to analyze and evaluate the entire system.
B) minimize the costs associated with materials handling and transportation.
C) reduce the number of distribution functions that are necessary.
D) find the cheapest price for each function and use them to create the system.
E) lower the service standards that the company has.

Question

Quizplus · Accepted Answer

Using a total-cost approach to analyze and evaluate the entire system is the best way to reduce overall distribution costs because it allows for a comprehensive view of all costs associated with the distribution process, including materials handling, transportation, and any other necessary functions. By analyzing the entire system, companies can identify areas where costs can be reduced and implement changes that will result in greater efficiency and lower overall costs. Minimizing costs associated with materials handling and transportation or reducing the number of distribution functions may only address part of the problem and may not result in the most effective overall cost reduction strategy. Finding the cheapest price for each function may also not result in the most efficient or effective system. Lowering service standards may reduce costs in the short term, but may ultimately result in a loss of customers and revenue.

The Best Way to Reduce Overall Distribution Costs Is to