Firms often consolidate shipments to save transportation cost, which results in higher inventory because inventory needs to accumulate before shipment. What is the goal of firms that do this?
A) Economies scale
B) Production economies of scale
C) Economies of scale in purchasing
D) Transportation economies of scale

Question

Quizplus · Accepted Answer

The goal of consolidating shipments is to achieve transportation economies of scale, which reduces the cost per unit of shipping by transporting larger quantities at once.

Firms Often Consolidate Shipments to Save Transportation Cost, Which Results