Final answer:
An efficient supply chain is preferred when demand is highly predictable and new product introductions are frequent. In situations with unpredictable demand or high product variety, a more responsive and flexible supply chain may be necessary.
Step-by-step explanation:
An efficient supply chain is preferred in situations where demand is highly predictable and new product introductions are frequent. In these scenarios, an efficient supply chain can help to minimize costs, improve delivery times, and prevent excess inventory. For example, if a company has accurate demand forecasts and frequently introduces new products, an efficient supply chain will enable them to quickly respond to customer demands while minimizing waste and reducing the risk of overstocking.
On the other hand, when demand is unpredictable or there is a high product variety, a responsive and flexible supply chain may be preferred. In these situations, the ability to quickly adapt to changing demands and customize products to meet customer preferences becomes more important than efficiency. For instance, in the fast fashion industry where trends change rapidly and customer preferences vary significantly, a responsive supply chain allows companies to quickly design, produce, and deliver new products to meet the ever-changing demand.
In summary, an efficient supply chain is preferred when demand is highly predictable and new product introductions are frequent. However, in situations with unpredictable demand or high product variety, a more responsive and flexible supply chain may be necessary.