Final answer:
Centralized placement can lead to increased shipping costs from the distribution center to the customer due to longer distances and potential congestion on delivery routes.
Step-by-step explanation:
One disadvantage of centralized placement is increased shipping costs from the distribution center to the customer. When finished goods are transported over congested street networks and jammed freeways, the costs can escalate and cut into profits. Unlike decentralized systems, where goods may be stored closer to the customer, centralized placement involves longer distance travel. This setup can lead to higher shipping expenses, especially if the distribution center is located far from customers or if there isn't easy access to cost-effective transport options like rail or water transport.
Comparatively, companies like Amazon have leveraged economies of scale by using highly computerized and centralized warehouses in low-rent locations to minimize average costs per sale. However, due to the centralization, the final leg of delivery might incur higher costs to bring products to individual customers. On the global scale, advancements in shipping, computing, and telecommunications have generally driven down transportation costs, but in the case of centralized placement, the specific location and distance to customers play a crucial role in determining shipping expenses.