Which of the following statements is false about global demand volatility?
A)When a company cancels its order during periods of demand downturn,the suppliers are left with inventories for which demand no longer exists.
B)When the company increases its order during periods of demand upswings,it takes a long time to get the goods through the supply chain due to longer lead times.
C)When demand for a product softens,companies can easily cancel orders with distant suppliers as compared to local suppliers.
D)When demand for a product increases,companies can place new orders with local suppliers with more assurance that it will be delivered on time.

Question

Quizplus · Accepted Answer

This statement is false as cancelling orders with distant suppliers may be logistically challenging and may attract contractual penalties. Cancelling orders with local suppliers may be relatively easier, as the communication channels may be better and the contractual provisions may be less stringent.

Which of the Following Statements Is False About Global Demand