Final answer:
Supply chain management is the process that coordinates flows among firms to maximize profitability. It includes all activities from transforming raw materials to finished products and works best when economies of scale are considered, allowing for lower costs with increased output.
Step-by-step explanation:
The concept that refers to the coordination of flows among firms to maximize total profitability is Supply chain management (A). Supply chain management involves the management of the flow of goods and services and includes all processes that transform raw materials into final products. It entails the active streamlining of a business's supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
When it comes to determining the optimal scale of production, firms need to consider economies of scale. Economies of scale occur when the cost per unit decreases as the quantity of output increases, which is common in industries such as those operated by warehouse stores like Costco or Walmart. A larger factory can produce goods at a lower average cost than a smaller one. Most supply chain issues can be resolved through advancements in technology, improved transportation methods, the establishment of supportive policies, and a commitment to labor rights.