Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following costs could potentially lead to customer dissatisfaction?

1. Advertising costs

2. Backorder costs

3. Transportation costs

4. Storage costs

The correct answer is: Backorder costs

Backorder costs can significantly contribute to customer dissatisfaction because they directly impact the customer’s experience and expectations. When products are out of stock and customers must place a backorder, it can lead to delays in receiving their items. This not only frustrates customers but can also lead to lost sales and a damaged reputation for the company. Customers often expect immediate gratification and timely delivery; when they encounter delays due to backordering, their satisfaction is likely to decrease. On the other hand, while advertising, transportation, and storage costs play important roles in a company’s financial health and operational efficiency, they do not have a direct and immediate effect on customer experiences in the same way backorder costs do. Advertising costs relate to promoting products rather than affecting delivery timelines, transportation costs usually pertain to logistics efficiency rather than directly impacting customer relationships, and storage costs are associated with inventory management rather than customer interactions. Thus, backorder costs are the most likely to lead to customer dissatisfaction as they directly influence the delivery and availability of products.