Question

Which of the following statements about a supply chain is true?

1) A supply chain focuses on the organizations involved in transforming raw materials to finished products but does not include the handling and management of products returned by customers.
2) A supply chain includes all organizations that contribute to the development, manufacture, and shipping of products to a consumer.
3) A supply chain refers to the organizations to which a company either offshores or outsources production or other operations.
4) A company that does not offshore or outsource production or other operations is said not to have a supply chain.

Answer 1

The correct statement regarding a supply chain is that it encompasses all participating organizations from raw material sourcing to delivery to consumers, including handling returns and maintaining ethical labor practices.

Step-by-step explanation:

The true statement about a supply chain is number 2, which states that a supply chain includes all organizations that contribute to the development, manufacture, and shipping of products to a consumer.

A supply chain is a network of entities involved in producing and delivering a product or service to consumers. It encompasses a sequence of activities that include sourcing raw materials, production, and distribution of finished products. This process often spans multiple companies and can cross international borders, leading to specialization and a division of labor. For instance, a product like an iPhone is designed in one country, parts are supplied from another, and assembly occurs in a third. Improvements in communication and transportation have facilitated this specialisation, enabling firms to split up the value chain, optimize costs, and expedite delivery.

The concept of a supply chain also extends to labor policies and the handling of returns. To achieve a more efficient and ethical supply chain, companies are encouraged to invest in their labor force and protect labor rights. Advanced technologies and international collaboration help in maintaining supply chains, especially during crises such as national emergencies, thus demonstrating the comprehensive nature of modern supply chains.