Question

Around 2008--2009, oil prices shot up to above $200 dollars a barrel from $75 a barrel. Shipping rates go up as gasoline price increases. A company that has plants and warehouses in the U.S. and Mexico wanted to re-evaluate its logistic/supply chain network which was conducted in 2002. Which of the following will be the most likely changes to their network in order to reduce total logistics costs? Group of answer choices They would need to increase the number of warehouses to lower transportation costs. They should reduce the number of warehouses so to tap in economies of scale They should improve the throughput rate of their warehouses/distribution centers Do nothing because oil price changes daily; the managers should not make a big fuss about it.

Answer 1

The Last second option is correct.

Step-by-step explanation:

The cost of oil has risen to over $200 a barrel of $75 a barrel. Delivery prices are increasing as the cost of gasoline rises. A corporation which has factories as well as storage facilities within the United States and Mexico needed to reconsider the logistics/supply chain system, which had been developed since 2002.

Thus, they must enhance the network throughput of with there storage facilities/service centers from which they adjust that system in response to reduce overall logistic costs.