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Echelon logistics operating arrangements accomplish which of the following?

Multiple Choice
a)Utilize warehouses to create inventory assortments and achieve consolidation economies.
b)Focus on reducing transportation cost.
c)Require at least 2 warehouse locations.
d)Are only used in the grocery industry.

1 Answer

5 votes

Final answer:

Option (a), Echelon logistics operating arrangements primarily utilize warehouses to streamline inventory and transportation costs by using economies of scale, a strategy exemplified by Amazon's large, computerized warehouses in low-rent areas.

Step-by-step explanation:

Echelon logistics operating arrangements aim to utilize warehouses to create inventory assortments and achieve consolidation economies. This means they focus on minimizing costs associated with inventory storage and transportation. Large-scale operations like Amazon exemplify the benefits of such arrangements by holding inventories in huge, highly computerized warehouses in low-rent areas, using economies of scale to lower the average cost per sale.

These logistical setups are not limited to one industry, as they can be applied wherever a company seeks to optimize its inventory management and reduce expenses related to shipping and warehousing. Accessibility to efficient transportation routes including uncrowded freeways, rail, or water transport adds to the cost-effective nature of echelon logistics. Thus, the correct answer to the question is the one that reflects these broad logistical efficiencies.

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