In a logistics system, transportation should be optimized at the expense of related logistics activities, such as inventory management, and procurement.

Question

BlackTom AI · Accepted Answer

The statement describes prioritizing transportation optimization at the expense of related logistics activities such as inventory management and procurement.

A critical way to analyze this is to recognize that logistics is an interconnected system where decisions in one area affect others. If transportation is optimized in isolation and costs are saved there, other parts of the supply chain may suffer: for example, lower transportation costs could come with longer lead times, higher inventory levels to cushion variability, or less favorable supplier terms from procurement.

Option evaluation:
- If the claim were true, it would imply a siloed optimization approach. In practice, such a strategy is discouraged because it often shifts costs rather than reducing total system-wide costs, and it can degrade service levels. 
- A holistic or total-cost-to-serve perspective promotes balancing transportation with inventory management and procurement so that overall efficiency and customer service improve, rather than focusing on a single metric at the expense of others.

Therefore, the assertion that transportation should be optimized at the expense of related logistics activities contradicts the principle of integrated logistics optimization. It neglects the interdependencies among transportation, inventory, and procurement, and it can lead to suboptimal performance across the supply chain.

BUSML 3380 AU2025 (2041) Midterm Practice Problems

In a logistics system, transportation should be optimized at the expense of related logistics activities, such as inventory management, and procurement.

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