Question

The demand for men's razor blades is predictable, with lower average demand forecast error, low profit margins and low stockout rates. Which of the following statements is most likely to be true for the supply chain of a company that provides razor blade refills for men's shavers?

Group of answer choices

A. None of these responses is correct.

B. The primary goal of this supply chain is cost minimization and efficiency

C. A vertically integrated supply chain is necessary to optimize value for all stakeholders

D. The primary goal of this supply chain is quick reaction to changes in demand

Answer 1

Since the demand of the razors is predictable, the variability is low. The low profit margins call for highly efficient system which minimises the cost. Low stockouts are also possible with highly efficient system, which works on very low margins.

Option B is right, as the primary goal of the supply chain is cost minimisation and efficiency.