Situations where incentives offered to different stages or participants in a supply chain lead to actions that increase variability and reduce total supply chain profits are referred to as
A)incentive obstacles.
B)information processing obstacles.
C)operational obstacles.
D)behavioral obstacles.

Question

Quizplus · Accepted Answer

Incentive obstacles in supply chains refer to situations where the incentives offered to different stages or participants in the supply chain are misaligned, leading to actions that increase variability and reduce total supply chain profits. These obstacles arise because the incentives (financial or otherwise) encourage behaviors that are beneficial to individual participants or stages but detrimental to the performance of the supply chain as a whole.

Situations Where Incentives Offered to Different Stages or Participants in a Supply