Highly centralized supply chains provide lower short-term costs,but higher,longer-term risk protection.

Question

Quizplus · Accepted Answer

Highly centralized supply chains are known to provide lower short-term costs due to economies of scale, but they also pose higher longer-term risk protection in case of disruptions or uncertainties. This is because a highly centralized supply chain is more vulnerable to any disruptions in the system, such as natural disasters, political instability, or global pandemics. On the other hand, a decentralized or diversified supply chain would have a better risk management strategy, as it is less dependent on a single source or location for supplies.

Highly Centralized Supply Chains Provide Lower Short-Term Costs,but Higher,longer-Term Risk