In which of the following ways can supply chain design improve positive net cash flows?

• A. By reducing production and inventory costs through efficient logistics
• B. By increasing the number of intermediaries in the distribution process
• C. By focusing solely on maximizing sales volume regardless of costs
• D. By ignoring demand forecasts and producing at maximum capacity

Answer: (A)

Verified step by step guidance

1. Understand that positive net cash flows occur when the inflows of cash exceed the outflows, which means the business is generating more money than it spends.
2. Recognize that supply chain design can impact costs and revenues by influencing production efficiency, inventory management, and logistics.
3. Evaluate each option by considering how it affects costs and revenues: increasing intermediaries often raises costs, ignoring demand forecasts can lead to overproduction and excess inventory, and focusing solely on sales volume without cost control can reduce profitability.
4. Identify that reducing production and inventory costs through efficient logistics directly lowers expenses, which improves net cash flows by increasing the difference between cash inflows and outflows.
5. Conclude that the best way supply chain design improves positive net cash flows is by optimizing logistics to reduce costs, rather than by increasing intermediaries or ignoring demand and costs.