Question

Which of the following is an advantage of manufacturer storage with direct shipping?

A) Transportation costs are low because the average outbound distance to the end consumer is small and package carriers are used to shipping the product.
B) Supply chains save on the fixed cost of facilities, because the need for other warehousing space in the supply chain has been eliminated.
C) Response times tend to be small because the order has to be transmitted from the retailer to the manufacturer.
D) Order tracking is easy to implement because of the complete integration of information systems at both the retailer and the manufacturer.

Answer 1

The advantages of manufacturer storage with direct shipping include low transportation costs and savings on the fixed cost of facilities. However, there may be some potential disadvantages as well.

Step-by-step explanation:

An advantage of manufacturer storage with direct shipping is that transportation costs are low because the average outbound distance to the end consumer is small and package carriers are used to shipping the product. This means that the product does not need to be transported from a warehouse to a retailer before reaching the end consumer, which saves on transportation costs. Additionally, with manufacturer storage and direct shipping, the need for other warehousing space in the supply chain is eliminated, leading to saving on the fixed cost of facilities. This makes the supply chain more cost-effective.

However, it is important to note that direct shipping may also have some disadvantages, such as limited flexibility in order fulfillment and potential delays if there are any issues with the manufacturer's inventory or shipping process.