Supply Chain Management

Answer: B - All operations of a supply chain are affected by design decisions. Decisions concerning the role of each facility are significant because they determine the amount of flexibility the supply chain has in changing the way it meets demand. For example, Honda has plants located worldwide in each market that it serves. Prior to 1998, each plant was only capable of serving its local market, which hurt Honda when the Asian economy went into a recession in the late 1990s. So the excess idle capacity was used to serve other markets that had more demand. This flexibility helps Honda serve other markets more effectively with changing global market conditions.