Comprehensive and Detailed Explanation (paraphrased from CIPS L4M2 content)

Standardising from many similar products to one common product is a classic variety reduction / standardisation decision.

In CIPS L4M2, when standardisation is discussed, the benefits highlighted include:

Economies of scale – buying larger quantities of a single product allows for better prices and volume discounts.

Reduced administration and handling costs – only one product code to manage, fewer invoices and orders, simpler stock control.

Simplified quality control – one specification and one performance profile to monitor.

Because the product is available from many suppliers, competition remains strong. This supports lower prices, not higher.

Option A (Lower costs) – correct, due to economies of scale and reduced process/handling complexity.

Option B (Fewer staff) – staff numbers are driven by overall workload, not just the number of product variants; standardising doesn’t automatically cut headcount.

Option C (Increased stock levels) – if anything, standardisation often reduces safety stock (you can pool demand into one line).

Option D (Increased costs) – contradicts the expected benefits of standardisation and competition between many suppliers.

Relevant CIPS L4M2 areas:

Standardisation and variety reduction in specifications

Economies of scale and cost drivers in sourcing decisions

Managing supply markets with multiple potential suppliers