Question

When a company uses a responsive or a(n) _____ supply chain strategy, it has the best opportunity to reduce inventory carrying costs.

A) Agile
B) Traditional
C) Reactive
D) Sequential

Answer 1

When a company uses a responsive or an Agile supply chain strategy, it has the best opportunity to reduce inventory carrying costs.

The correct answer is A) Agile.

What is agile supply chain strategy?

An Agile supply chain strategy is about being able to change quickly and easily to meet the needs of customers and the market. It focuses on being able to quickly help customers, adapt to changes in what customers want, and handle changes in the market. This plan works really well in changing and uncertain business situations.

One of the main benefits of an Agile supply chain strategy is that it reduces the cost of keeping inventory. Inventory carrying costs are the expenses of keeping and handling inventory, like storage, insurance, obsolescence, and financing.

Answer 2

An agile (option A) supply chain strategy provides companies with the best opportunity to minimize inventory carrying costs by enabling quick responses to market changes, resulting in lower inventory levels.

Step-by-step explanation:

When a company uses a responsive or an agile supply chain strategy, it has the best opportunity to reduce inventory carrying costs. Agile supply chain strategies allow companies to respond quickly to market changes and customer demands. This responsiveness enables companies to maintain lower levels of inventory because they can respond quickly and efficiently to orders as they come in rather than storing large amounts of products.


On the other hand, traditional, reactive, and sequential strategies are less equipped to cope with market volatility, often resulting in higher inventory costs due to the need for buffer stocks or a lack of flexibility in production.