Stefan's compensation plan rewards his hard work by paying him ten cents per mile driven while he delivers orders to the downstream members of his supply chain.Some managers view this reward as counterproductive since there is a temptation to take the longest route between two points rather than making more deliveries.This obstacle to supply chain coordination falls into the category of

Question

Quizplus · Accepted Answer

The compensation plan creates an incentive obstacle because it motivates behavior (taking longer routes) that is counterproductive to the overall efficiency of the supply chain, which ideally would prioritize making more deliveries in less time.

Stefan's Compensation Plan Rewards His Hard Work by Paying Him