Certified Supply Chain Professional (CSCP) Practice Exam

Which approach can be used to lower production costs through the use of components?

1. Maximizing the variety of parts used

2. Standardizing parts and using common components

3. Using custom parts for each model

4. Limiting production to high-end materials

The correct answer is: Standardizing parts and using common components

Using standardized parts and common components is an effective approach to lowering production costs. Standardization reduces complexity in the manufacturing process, allowing for economies of scale. When components are uniform and interchangeable, manufacturers can benefit from bulk purchasing, reducing the cost per unit. Additionally, standardized parts streamline inventory management and reduce the likelihood of errors that could arise from using a multitude of specialized components. This efficiency not only minimizes production time but can also lessen the need for extensive training for workers, further contributing to cost savings. In contrast, maximizing the variety of parts would complicate production, increase inventory costs, and likely require more intricate supply chain management. Employing custom parts for each model can lead to higher costs due to low production volumes and increased complexity. Limiting production to high-end materials does not inherently apply to cost reduction; in fact, it can often lead to increased expenses due to premium pricing. Thus, the strategy of standardizing parts is aligned with achieving a more cost-effective production process.