The Best Way to Reduce Overall Distribution Costs Is to

question 146

Multiple Choice

The best way to reduce overall distribution costs is to

• A) use a total-cost approach to analyze and evaluate the entire system.
• B) minimize the costs associated with materials handling and transportation.
• C) reduce the number of distribution functions that are necessary.
• D) find the cheapest price for each function and use them to create the system.
• E) lower the service standards that the company has.

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Definitions:

Working Capital

is the difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency.

Discount Rate

The interest rate used to discount future cash flows to their present value, reflecting the opportunity cost of capital.

Operating Cash Inflows

The money received by a company from its normal business operations.

Incremental Cost Approach

A decision-making process that focuses on the costs that will change if an action is taken, compared to if it is not taken.