Certified Supply Chain Professional (CSCP) Practice Exam

When is it advantageous to add more warehouses?

1. For improved long-distance freight transport

2. When rapid delivery to local customers is essential

3. To reduce overall product variety

4. For managing excess inventory

The correct answer is: When rapid delivery to local customers is essential

Adding more warehouses is particularly advantageous when rapid delivery to local customers is essential. This strategy directly supports enhanced customer satisfaction and competitive advantage in markets where speed of service is a key differentiator. By positioning warehouses closer to end consumers, companies can significantly decrease the time it takes to fulfill orders, thereby meeting consumer expectations for quick delivery. In addition, having a network of localized warehouses allows businesses to react more swiftly to fluctuations in demand or changes in customer preferences, which can be crucial for maintaining market share in fast-paced industries. Enhanced proximity to customer bases also enables companies to optimize their distribution processes, resulting in lower transportation costs and improved overall efficiency. The other options do not directly relate to the operational benefits derived from adding more warehouses in the context of fast delivery. For instance, while managing excess inventory might seem like a justification for increasing warehouse capacity, it does not inherently focus on improving service to customers. Instead, it addresses inventory levels which could be managed through better supply chain practices.