Which of the following is not an example of inefficiencies in the supply chain?
A) Parts shortages
B) Underused plant capacity
C) Excessive finished goods inventory
D) High transportation costs
E) High switching costs

Question

Quizplus · Accepted Answer

High switching costs are not related to inefficiencies in the supply chain. They are the costs incurred by a customer when switching from one supplier to another and are not tied directly to the performance of the supply chain. All other options listed are examples of inefficiencies in the supply chain. Parts shortages can result in delays in production or lost sales, underused plant capacity leads to higher fixed costs and lower productivity, excessive finished goods inventory ties up capital and warehouse space, and high transportation costs can result in inflated product prices or reduced profit margins.

Which of the Following Is Not an Example of Inefficiencies