Which of the following consequences is a result of shipping directly from the point of manufacture to the customer rather than through a distribution network?
Context: Shipping directly from the point of manufacture to the customer eliminates the intermediate distribution network.
Options Breakdown:
A. Delivery lead times are consistent: Not necessarily true, as direct shipping can have variable lead times.
B. Risk pooling benefits are negated: Distribution centers pool inventory to reduce variability in demand and supply; direct shipping bypasses this advantage.
C. Distribution overhead is increased: Actually, distribution overhead is typically reduced with direct shipping.
D. Order-fill rate is decreased: Not necessarily true, as it depends on the efficiency of the direct shipping process.
Correct Answer Justification: Risk pooling helps manage demand variability and inventory levels more effectively; direct shipping bypasses distribution centers, thus negating these benefits.
References:
Supply chain management textbooks and articles
Research on direct shipping vs. distribution center logistics
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