CIPS Achieving Competitive Advantage Through the Supply Chain (L5M7) L5M7 Question # 18 Topic 2 Discussion
L5M7 Exam Topic 2 Question 18 Discussion:
Question #: 18
Topic #: 2
Jerry works in product development at a clothing manufacturer. The company is discussing ways of adding value for customers. Jerry suggestsreducing pricescould be a form of added value. Is he correct?
A.
Yes – this is a form of added value but requires the ability of the supply chain to reduce costs.
B.
Yes – this will increase the company’s profit margin.
C.
No – added value is only a form of innovation.
D.
No – as the customer is not offered anything additional to their purchase.
Added Valuearises whenever the customer perceives extra benefit.Lowering pricescan add value if thesupply chain reduces coststo support it sustainably.
Short cited term: “price reduction is a form of added value if supported by cost efficiencies.” (L5M7 Study Guide, p. 35)
[Reference:CIPS L5M7 Study Guide, p. 35., ]
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