Final answer:
It is true that managers can improve supply chain coordination by aligning goals and incentives to maximize total supply chain profits, as this facilitates efficient operation and responsiveness to market demands.
Step-by-step explanation:
Managers can improve coordination within the supply chain by aligning goals and incentives such that every participant in supply chain activities works to maximize total supply chain profits; this statement is true. Effective coordination among different participants in the supply chain, such as the two factory owners mentioned, can lead to significant benefits. These include better inventory management, smoother production schedules, quicker response times to market demands, and overall, a more efficient and profitable operation.
When supply chain coordination is achieved, it can lead to results similar to those observed in perfectly competitive markets where firms and consumers interact to maximize their individual utilities, leading to both productive and allocative efficiency. In the context of the supply chain, technological advancements and improved transportation methods can significantly bolster coordination efforts, further enhancing the efficiency of the entire chain from production to market. Additionally, it is vital for firms to commit to change in areas like labor policies to maintain stability in supply chains and respond effectively during national emergencies. Still, an emphasis on aligning incentives is paramount to ensure all parties are motivated to work towards the common goal of maximizing profits across the entire supply chain.