Efficient supply chains are used by firms that:

• A. seek to minimize production and distribution costs to remain competitive
• B. ignore market prices when sourcing inputs
• C. focus exclusively on maximizing product variety regardless of cost
• D. prefer to operate in monopolistic markets with little competition

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of an efficient supply chain. An efficient supply chain is designed to minimize costs related to production and distribution while meeting customer demand effectively.
2. Step 2: Analyze each option in the context of supply chain efficiency. Efficient supply chains aim to reduce costs and improve competitiveness, so options that ignore costs or focus solely on variety without regard to cost are less likely to be correct.
3. Step 3: Recognize that ignoring market prices when sourcing inputs would likely increase costs, which contradicts the goal of efficiency.
4. Step 4: Note that focusing exclusively on maximizing product variety regardless of cost can increase complexity and costs, which is not consistent with efficiency.
5. Step 5: Understand that preferring monopolistic markets is unrelated to supply chain efficiency, which is about cost minimization and competitiveness in any market structure.