A Senior Executive at Keep It Clean Claims That a Move

question 147

Multiple Choice

A senior executive at Keep It Clean claims that a move to a just-in-time logistics is ill-advised because the change would not be noticed by customers,and because the proposed system violates the company's goal of being "customer-focused." What is the most accurate criticism of the executive's position?

• A) You can't prove that focusing on the customer helps an organization become successful.
• B) No improvement to the company's current system is suggested.
• C) It doesn't consider the possibility that having a more efficient supply chain will allow the company to offer more value to its customers.
• D) It doesn't address the question of whether the costs of switching to the new system would outweigh the cost-reduction benefits the new system might provide.
• E) It does not take into account the logistics systems used by the company's competitors.

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Definitions:

Variable Costs

Expenditures that are directly linked to the production or sales volume, including direct labor and raw materials.

Refurbishing Materials

Materials used in the process of cleaning, repairing, and updating an item to bring it back to a like-new condition, often in electronics and furniture.

Containers Refurbished

Involves repairing, cleaning, and updating used containers to extend their useful life or repurpose them for other uses.

Spending Variance

The difference between the actual cost incurred for an item and its planned or budgeted cost, indicating how well a company manages its expenses.