Question

Shipping costs could be justified if the firm is able to compensate for the increased shipping costs with reduced inventory holding costs while achieving the same in-stock probability.

a) True
b) False

Answer 1

The given statement is "True".

Step-by-step explanation:

• Increasing in-stock likelihood contributes to higher demand responsiveness, rapid transporting reduces time and therefore also accommodates for shipping expenses.
• The net expense seems to be the number of shipping including holdings. Therefore if either variable rises, the overall cost may be retained by reducing some other characteristic or function.

So the answer above is accurate.