Practice Quiz

Supply Chain Management

Category - Design and Improvement

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The biggest advantage of drop shipping is its ability to __________ at the manufacturer’s.
  1. Centralize inventories
  2. Capitalize profits
  3. Hold large amount of backlog
  4. All of the above
Explanation
Answer: A - The biggest advantage of drop-shipping is the ability to centralize inventories at the manufacturer. A manager can aggregate demand across all retailers that they supply and, as a result, the supply chain is able to provide a higher level of product availability with lower levels of inventory.
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