A Senior Executive Claims That a Move to a "Just-In-Time

question 130

Multiple Choice

A senior executive claims that a move to a "just-in-time" logistics system would be a mistake because even if the system is effective at reducing inventory and handling costs, the change would not be noticed by customers. The executive claims that the change should be rejected as it runs counter to Clean Sweep's goal of being "customer-focused." Which of the following is the best criticism of the senior executive's position?

• A) It does not prove that focusing on the customer helps an organization become successful.
• B) It does not suggest an improvement to Clean Sweep's current system.
• C) It fails to recognize that having a more efficient supply chain will allow Clean Sweep to offer more value to its customers.
• D) It does not establish that the costs of switching to the new system would outweigh any cost-reduction benefits the system might provide.
• E) It does not describe the inventory systems used by Clean Sweep's competitors.

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Definitions:

Economic Theory

A framework or model that attempts to explain the workings of economic systems through the analysis of various variables and their relationships.

Option

A financial derivative that gives the buyer the right, but not the obligation, to buy or sell an asset at a specific price on or before a certain date.

Objectively

In a manner that is not influenced by personal feelings or biases, based on factual and unbiased considerations.

Labor

The human effort, both physical and mental, used in the production of goods and services.