Discover how implementing a distribution warehouse network can significantly reduce inventory carrying costs. Gain insights from APICS CSCP exam experts to optimize your supply chain strategy.
Table of Contents
Question
The implementation of a distribution warehouse network typically will reduce which of the following types of costs?
A. Transportation
B. Packaging
C. Material handling
D. Inventory carrying
Answer
D. Inventory carrying
Explanation
A distribution warehouse network implementation typically reduces inventory carrying costs the most.
Here’s why:
- Warehouses allow consolidating inventory in fewer strategic locations
- This lowers total system-wide inventory levels needed
- Less inventory means less capital tied up and lower holding costs
- Transportation, packaging, and handling costs may actually increase to support the warehouse network
So while the other costs mentioned can be impacted, inventory carrying cost reduction is usually the primary driver and benefit of implementing a distribution warehouse network.
APICS Certified Supply Chain Professional CSCP certification exam practice question and answer (Q&A) dump with detail explanation and reference available free, helpful to pass the APICS Certified Supply Chain Professional CSCP exam and earn APICS Certified Supply Chain Professional CSCP certification.